X purchased land and then erected a building. The following costs incurred were:

Purchase price of land	1,000,000
Resource consent fees	70,000
Architects and Engineers fees	100,000
Construction of Building	1,500,000
Interest costs in relation to the Building (over the period)	180,000

The Building became available for use 3 months into the financial year ended 31 March 2017.  

1. Calculate Depreciation using the Straight Line Method at 2.5% for this year; there is a nil residual value.
2. Calculate depreciation for the year ended 31 March 2018

Answer rating: 100% (QA)

Solution To calculate depreciation using the Straight Line Method we need to first calculate the tot... View the full answer