Refer to the situation described in BE 11–14. Assume that instead of changing the useful life and residual value, in 2021 the company switched to the double-declining-balance depreciation method. How should Robotics account for the change? What is depreciation on the building for 2021?
BE 11–14
At the beginning of 2019, Robotics Inc. acquired a manufacturing facility for $12 million. $9 million of the purchase price was allocated to the building. Depreciation for 2019 and 2020 was calculated using the straight-line method, a 25-year useful life, and a $1 million residual value. In 2021, the estimates of useful life and residual value were changed to 20 years and $500,000, respectively. What is depreciation on the building for 2021?
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