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Computing Depreciation and Accounting for a Change of Estimate In January of Year...

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Accounting

Computing Depreciation and Accounting for a Change of Estimate
In January of Year 1, Rankine Company paid $17,000,000 for land and a building. An appraisal estimated that the land had a fair value of $5,000,000 and the building was worth $12,000,000. Rankine estimated that the useful life of the building was 30 years, with no residual value.
a. Calculate annual depreciation expense using the straight-line method.
9
b. Calculate depreciation for Year 1 and Year 2 using the double-declining-balance method.
Do not round until your final answer. Round answer to the nearest whole number.
Year 1$
Year 2$
c. Assume that in Year 3, Rankine changed its estimate of the useful life of the building to 25 years. If the company is using the double-declining-balance method of depreciation, what amount of depreciation expense would Rankine record in Year 3?
Do not round untilyour final answer. Round answer to the nearest whole number.
$909,389
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