A house has a total cost new of $212,340. It is 12 years old and has an estimated remaining economic life of 38 years. The cost to cure deferred maintenance items is $670. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified totaling $4,850. What is the amount of long-lived depreciation attributable to the building

If a house has a total cost new of $212,340. It is 12 years old and has an estimated remaining economic life of 38 years. The cost to cure deferred maintenance items is $670. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified totaling $4,850. The amount of long-lived depreciation attributable to the building is $46,000

First step is to determine the total economic life

Economic life=12 years+38 years

Economic life = 50 years

Second step is to calculate depreciation percentage

Depreciation percentage=12/(50) ×100

Depreciation percentage= 24%

Third step is to calculate the cost of long lived items

Using this formula

Cost of items=Total cost-Deferred maintenance -Short lived items

Cost of items=$212,340 - $670 - $20,000

Cost of items= $191,670

Now let determine the amount of long-lived depreciation attributable to the building

Using this formula

Long-lived depreciation attributable to building= Cost of the long-lived items× Depreciation percentage

Let plug in the formula

Long-lived depreciation attributable to building=$191,760×24%

Long-lived depreciation attributable to building= $46,000

Inconclusion if a house has a total cost new of $212,340. It is 12 years old and has an estimated remaining economic life of 38 years. The cost to cure deferred maintenance items is $670. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified totaling $4,850. The amount of long-lived depreciation attributable to the building is $46,000

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$ 46,000

Explanation:

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