Final answer:
The amount of annual depreciation for a building with a cost of $123,750, a residual value of $24,750, and a useful life of 9 years is $11,000 when using the straight-line depreciation method.
Step-by-step explanation:
To calculate the annual depreciation of a building using the straight-line method, we need to subtract the estimated residual value of the building from its original cost, and then divide the result by the estimated useful life of the building.
Calculation of Annual Depreciation
The formula for calculating annual depreciation using the straight-line method is:
Annual Depreciation = (Cost of the Asset - Residual Value) ÷ Useful Life
Given that the cost of the building is $123,750, the estimated residual value is $24,750, and the estimated useful life is 9 years, we can use the formula as follows:
Annual Depreciation = ($123,750 - $24,750) ÷ 9
Annual Depreciation = $99,000 ÷ 9
Annual Depreciation = $11,000
The amount of annual depreciation for the building is $11,000.