Question
The Original Cost of a building was 550,000 , and it is beind depreciated by the stright line method for 25 years. The residential value
The Original Cost of a building was 550,000 , and it is beind depreciated by the stright line method for 25 years. The residential value is expected to be insignificant and has been ignored. The Balance of the related accumulated depreciation account after the depreciation adj at the end of the preceding year is 330,000.
A Number of major structural repairs on a building were completed at the beginning of the current fiscal year at a cost of 50,000. The repairs are expected to extend the life of the building 8 years beyond the original estimate.
1. What has the amount of annual dep been in past years (assuming that the building was purchased on Jan 1 in the year of acquisition?
2. to what account should the 50,000 cost of repairs be debited?
3. what is the book value of the building after the repairs have been recorded?
4. What is the amount of revised dep for the current year, using the straight line method, and assuming that the repairs were completed at the very beginning of the year?
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