Question

Martinez Company owns a building that appears on its prior year-end balance sheet at its original $740.000 cost less $555,000 accumulated depreclation. 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 $74,000 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 pald in cash View Debit

Plz help me

Answer 1

3. Computation of book Value
Cost of building	$7,40,000.00
Add cost of repairs	$74,000.00
Less accumulated depreciation	$5,55,000.00
Revised book value of building	$2,59,000.00

Part-4
New Estimated useful life (20-15+5)	10
Revised Annual Depreciation (259000/10)	$25,900.00

Date	account and explanation	debit	credit
Dec-31	Depreciation expense	$25,900.00
	Accumulated depreciation-building		$25,900.00
	(To record dep)