A house and lot valued at $ 90000 is being depreciated over 25 years by the straight-line method . After 19 years, the book value of the asset is $ 33000 . Since only the value of the house depreciates, find the assumed value of the land. (Ignore inflation.)

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anonymous · Answer

The assume values of the land is $15000.
Since original book value was $90k and current book value (after 19 years) is $33K then $57K has been depreciated, i.e. $90k-$33K = $57K.  Since it straight line depreciation then it is dpreciating at $57k/19 = $3k per year.  Therefore total depreciation in 25 years will be $75k.  Since only the house was depreciated, the full $75k of depreciation belong to  the house leaving $15k for the land.

anonymous · Answer

thank you!!!