At its December 31, 2019, year-end, Athletic Apparel had a warehouse with an adjusted book value of
Question:
At its December 31, 2019, year-end, Athletic Apparel had a warehouse with an adjusted book value of $292,500 and an estimated remaining useful life of 15 years and residual value of $90,000. Because of pick-up and delivery issues at the warehouse, a contractor was hired to construct a new door into the east wall during the week of January 5, 2020, for $25,500 on account. The estimated useful life of the door is 15 years with an estimated residual value of $7,500. Athletic uses the straight-line method to depreciate assets.
Required
1. Record the installation of the new door.
2. Record total depreciation on the warehouse at December 31, 2020.
Step by Step Answer:
Fundamental Accounting Principles Volume I
ISBN: 978-1260305821
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann