In 1994, Coronado Limited completed the construction of a building at a cost of $1.59 million; it occupied the building in January1995. It was estimated that the building would have a useful life of 40 years and a residual value of $390,000.Early in 2005, an addition to the building was constructed at a cost of $580,000. At that time, no changes were expected in its usefullife, but the residual value with the addition was estimated to increase by $130,000. The addition would not be of economic use tothe company beyond the life of the original building.In 2023, as a result of a thorough review of its depreciation policies, company management determined that the building's originaluseful life should have been estimated at 30 years. The neighbourhood where the building is has been going through a renewal, witholder buildings being torn down and new ones being built. Because of this, it is now expected that the company's building andaddition are unlikely to have any residual value at the end of the 30-year period. Coronado follows IFRS for its financial statements. Using the straight-line method, calculate the annual depreciation that was charged from 1995 through 2004.
In 1994, Coronado Limited completed the construction of a building at a cost of $1.59 million; it occupied the building in January
1995. It was estimated that the building would have a useful life of 40 years and a residual value of $390,000.
Early in 2005, an addition to the building was constructed at a cost of $580,000. At that time, no changes were expected in its useful
life, but the residual value with the addition was estimated to increase by $130,000. The addition would not be of economic use to
the company beyond the life of the original building.
In 2023, as a result of a thorough review of its
useful life should have been estimated at 30 years. The neighbourhood where the building is has been going through a renewal, with
older buildings being torn down and new ones being built. Because of this, it is now expected that the company's building and
addition are unlikely to have any residual value at the end of the 30-year period. Coronado follows IFRS for its financial statements.
Using the straight-line method, calculate the annual depreciation that was charged from 1995 through 2004.
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