Richmond owns land and a building.The land was bought for $75,000 and the building was built for $625,000.The company expects to use the site for 25 years.If the company has owned and used the assets for five years, what are their net book values (NBV)?
$\begin{array}{cc}
&\text { Land NBV } & \text { Building NBV } \
A.&\$ 60,000 & \$ 500,000 \
B.&\$ 75,000 & \$ 500,000 \
C.&\$ 60,000 & \$ 625,000 \
D.&\$ 75,000 & \$ 625,000
\end{array}$

Question

Richmond owns land and a building.The land was bought for $75,000 and the building was built for $625,000.The company expects to use the site for 25 years.If the company has owned and used the assets for five years, what are their net book values (NBV)? 
$\begin{array}{cc}
&\text { Land NBV } & \text { Building NBV } \
A.&\$ 60,000 & \$ 500,000 \
B.&\$ 75,000 & \$ 500,000 \
C.&\$ 60,000 & \$ 625,000 \
D.&\$ 75,000 & \$ 625,000
\end{array}$

Quizplus · Accepted Answer

Land is not depreciated, so its NBV remains $75,000. The building is depreciated over 25 years, so after 5 years, its NBV is $625,000 - ($625,000/25 * 5) = $500,000.

Richmond Owns Land and a Building A)Option a B)Option B C)Option C D)Option D

Richmond Owns Land and a Building A)Option a
B)Option B
C)Option C
D)Option D