Peoples Corporation Purchased a Building on December 29,2012 That Cost

Multiple Choice

Peoples Corporation purchased a building on December 29,2012 that cost $1,000,000 and occupied it on January 2,2013.The owner estimated that the building would last 40 years with a salvage value of $100,000 using straight-line depreciation.In early 2016,Mr.Peoples learned that due to a permanent highway closure,the company needs to relocate at the end of 2018.He believes that the salvage value at that time will be $700,000.Compute the amount of depreciation to record during 2016,and each of the two years thereafter.

A) $22,500
B) $52,500
C) $77,500
D) $100,000