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Sagot :
Answer:
FedEx
Applying the policies of FedEx:
a and b. Total repairs and maintenance expenses to be charged to the income statement = $129,000 ($7,000 + $122,000).
c. The building extension cost of $230,000 will be capitalized.
The Building will now have a total cost value of $950,000 Accumulated Depreciation of $396,000.
Therefore, the net book value of building at the end of December 31, 2011 will be $554,000 ($950,000 - $396,000).
Explanation:
a) Data and Analysis:
Cost of existing building = $720,000
Book value of existing building = $360,000 ($720,000 * 10/20)
Transactions and adjustments during 2011:
a. Repairs and Maintenance Expenses $7,000 Cash $7,000
b. Repairs and Maintenance Expenses $122,000 Cash $122,000
c. Building extension $230,000 Cash $230,000
d. Depreciation Expense on existing building = $36,000 ($720,000/20).
e. Accumulated Depreciation on Building, Dec. 31, 2011 = $396,000 ($360,000 + $36,000)
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