Final answer:
The write-off of the $150,000 spent on improvements to the leased building is $10,000 per year, calculated by dividing the total cost by the 15-year estimated useful life.
Step-by-step explanation:
The amount written off for the improvements per year is the total cost of the improvements divided by their estimated useful life. The improvements cost $150,000 and have an estimated useful life of 15 years. Therefore, the annual write-off amount for the improvements would be $10,000 per year ($150,000 / 15 years).The write-off of the expenditure for improvements to the leased building amounts to $10,000 per year. This can be calculated by dividing the cost of the improvements by the estimated useful life: $150,000 / 15 years = $10,000 per year.
To calculate the annual write-off (depreciation) for the improvements made to the building, you can use the straight-line depreciation method, which evenly spreads the cost over the estimated useful life.
The formula for straight-line depreciation is:
Depreciation expense per year= Cost of improvements
Estimated useful life
Depreciation expense per year=
Estimated useful life
Cost of improvements.