Nicolla Company Recorded the Purchase of a Building in 2017

question 14

Essay

Nicolla Company recorded the purchase of a building in 2017 at a cost of $7,000,000.At the time of purchase,the estimated useful life of the building was 25 years.The company depreciates the building on a straight-line basis and has chosen to record a full year of depreciation in the year of acquisition,and none in the year of disposal.
It is now 2027.Nicolla has found it necessary to replace all of the windows in this building at a cost of $1,000,000.Upon further review,management concluded that the windows should have been recorded as a separate component because,the manufacturer's specifications indicated that the windows would had a 10 year life expectancy.The estimated value of the windows when the building was purchased was $600,000.
Required:
Assume that LaSalle committed an error in not componentizing the windows separately from the building.Record the journal entry to record the windows as a separate component,correct all errors and record the replacement of the windows.

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Definitions:

Subcutaneously

Referring to the administration of medication or fluids injected just under the skin, into the tissue layer between the skin and the muscle.

Gastroenteritis

An inflammation of the stomach and intestines, typically resulting from bacterial toxins or viral infection and causing vomiting and diarrhea.

Numeric Rating Scale

A tool used for assessing the intensity of pain on a scale typically ranging from 0 to 10, where 0 means no pain and 10 means the worst possible pain.

Tylenol

A brand name for acetaminophen, an over-the-counter medication used to reduce pain and fever.