On January 1, 2013, Moran Manufacturing has a building with a net book value of $357,000, no

Question:

On January 1, 2013, Moran Manufacturing has a building with a net book value of $357,000, no , and a remaining useful life of 7 years. During January, major renovations in the amount of $73,000 are conducted and add five more years to the building's useful life and increase the to $40,000. Moran uses the straight-line method of depreciation.
Required
a. Determine the amount of depreciation that Moran recorded in 2012. Hint: think about how straight-line depreciation works.
b. Determine the net book value of the building immediately after the repairs were completed.
c. Calculate depreciation expense for the year 2013. Assume that the cost of the renovation is depreciated for a full year in 2013. Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...