Question
Exercise 8-15 Extraordinary repairs; plant asset age LO C3 Martinez Company owns a building that appears on its prior year-end balance sheet at its original
Exercise 8-15 Extraordinary repairs; plant asset age LO C3
Martinez Company owns a building that appears on its prior year-end balance sheet at its original $590,000 cost less $442,500 accumulated depreciation. The building is depreciated on a straight-line basis assuming a 20-year life and no salvage value. During the first week in January of the current calendar year, major structural repairs are completed on the building at a $59,000 cost. The repairs extend its useful life for 5 years beyond the 20 years originally estimated. 1. Determine the building's age (plant asset age) as of the prior year-end balance sheet date.
2. Prepare the entry to record the cost of the structural repairs that are paid in cash.
Journal entry worksheet
Note: Enter debits before credits.
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3. Determine the book value of the building immediately after the repairs are recorded.
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4. Prepare the entry to record the current calendar year's depreciation.
Note: Enter debits before credits.
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