Question
Novak Company constructed a building at a cost of $2,684,000 and occupied it beginning in January 1998. It was estimated at that time that its
Novak Company constructed a building at a cost of $2,684,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2018, a new roof was installed at a cost of $366,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $195,200.
1) What entry should be made in 2018 to record the replacement of the roof? (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2) Prepare the entry in January 2018 to record the revision in the estimated life of the building, if necessary. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
3) What amount of depreciation should be charged for the year 2018?
a) Depreciation for the year 2018 (Assume the cost of the old roof is removed)
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