A Number of Major Structural Repairs Completed at the Beginning $\$ 1,000,000$

question 219

Essay

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 building 10 years beyond the 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 value is negligible and 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?
(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?
(f) What is the amount of straght-line depreciation for the current year, assuming that the repairs were completed at the very beginning of the current year? Round to the nearest dollar.

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Definitions:

Writ of Certiorari

A legal order issued by a higher court to a lower court to send up records of a case for review, often used by the Supreme Court to select specific cases for examination.

Class Action

A legal procedure that allows many people with similar grievances to combine their lawsuits into one action against a common defendant.

Plurality Action

A decision-making process or election outcome determined by the largest fraction of votes, even if it does not constitute a majority.

Amicus Curiae

A legal term referring to someone not a party to a case who offers information, expertise, or insight that has a bearing on the issues in the case.