Answer:
$54,260
Step-by-step explanation:
Marjorie Corporation acquired a building on January 1, 2019, for $ 600000. The building had an estimated useful life of 20 years and an estimated salvage value of $ 26000.
On January 1, 2021, Marjorie Corporation determined that the building could only be used for another 10 years and there would be no salvage value.
In computing the depreciation expense for the year ending December 31, 2021, if Marjorie Corporation uses straight minus line depreciation;
Step 1. we have to determine the value of the building as at January 2021
This is the cost less the accumulated depreciation to that point in time
Accumulated Depreciation = Cost - Scrap Value / Number of years x Amount of time in use.
Therefore Accumulated Depreciation = [(600,000 - 26,000) / 20 years] x 2 years (2019 - 2021) = $57,400
Cost - Accumulated Depreciation = 600,000 - 57,400 = 542,600
Step 2. Depreciation expense for 2021
Therefore since the value of the asset is now 542,600 and now has a value of 10 years with no scrap value
Depreciation = (Cost - Scrap value) / No. of years
Depreciation = 542,600 - 0 / 10 years = $54260