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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