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

question 33

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)Whathas the amount of anmual depreciation been in past years?
(b)What was the original life estimate of the builcing?
(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 amoun of straight-line depreciation for the current year; assuning that the repairs were completed at the very beginring of the current year? Round to the nearest dollar.

---

Definitions:

Parameters

Boundaries or limits that define the range within which a process or operation is performed or an investigation is conducted.

Measurable Factors

Quantifiable elements that can be used to assess progress or performance.

Contingency Reserve

Funds allocated within a project budget to address unforeseen situations or risks, providing a buffer for unplanned expenses.

Unspecified Extra Costs

Additional expenses that were not originally planned or accounted for in a project's budget, often arising from unforeseen circumstances or changes.