A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000 are expected to extend the life of a bu original estimate. The original cost of the building was $6,552,000, and it has been depreciated by the straight-line method for 25 years. Estimated residi has been ignored. The related accumulated depreciation account after the depreciation adjustment at the end of the preceding fiscal year is $4,550,000. a. What has the amount of annual depreciation been in past years? b. What was the original life estimate of the building? years c. To what account should the $1,000,000 be debited? d. What is the book value of the building after the extraordinary repairs have been made? e. What is the expected remaining life of the building after the extraordinary repairs have been made? years 4 f. What is the amount of straight-line depreciation for the current year, assuming that the repairs were completed at the very beginning of the current year? the nearest dollar.
A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000 are expected to extend the life of a bu original estimate. The original cost of the building was $6,552,000, and it has been depreciated by the straight-line method for 25 years. Estimated residi has been ignored. The related accumulated depreciation account after the depreciation adjustment at the end of the preceding fiscal year is $4,550,000. a. What has the amount of annual depreciation been in past years? b. What was the original life estimate of the building? years c. To what account should the $1,000,000 be debited? d. What is the book value of the building after the extraordinary repairs have been made? e. What is the expected remaining life of the building after the extraordinary repairs have been made? years 4 f. What is the amount of straight-line depreciation for the current year, assuming that the repairs were completed at the very beginning of the current year? the nearest dollar.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.3E
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Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Assignment 1
O. MC.10-065
1. MC.10-066
12. MC.10-067
13. MC.10-067.ALGO
14. MC.10-068
15. MC.10-068.ALGO
16. MC.10-072
17. MC.10-073
18. MA.10-150.Part1
19. MA.10-158
20. MA. 10-158.Part1
21. MA.10-166
22. EX.10-179
A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000 are expected to extend the life of a buildin
original estimate. The original cost of the building was $6,552,000, and it has been depreciated by the straight-line method for 25 years. Estimated residual
has been ignored. The related accumulated depreciation account after the depreciation adjustment at the end of the preceding fiscal year is $4,550,000.
a. What has the amount of annual depreciation been in past years?
b. What was the original life estimate of the building?
years
c. To what account should the $1,000,000 be debited?
d. What is the book value of the building after the extraordinary repairs have been made?
$
e. What is the expected remaining life of the building after the extraordinary repairs have been made?
years
4
f. What is the amount of straight-line depreciation for the current year, assuming that the repairs were completed at the very beginning of the current year? Rou
the nearest dollar.
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Step 1: a. Determination of amount of annual depreciation :
VIEWStep 2: b. Determination of original life of the building :
VIEWStep 3: c. The account should be debited to :
VIEWStep 4: d. Determintion of Book value of the building :
VIEWStep 5: e. Determination of expected remaining useful life of the building :
VIEWStep 6: f. Determination of amount of straight line depreciation :
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