Rachel co. acquired an old 5-story building of 500,000 at cost and renovated it into a...

   

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Rachel co. acquired an old 5-story building of 500,000 at cost and renovated it into a modern office building. Renovation costs and other details are as follows: -Renovation costs (i.e. repainting, floor replacing, windows/doors remodeling, ...): 20,000 - An elevator installed for the first time: 40,000 - New modern air condition system: 15,000. The office building was ready for intended use at 01 January 20X7 which being depreciated over 25 years by straight line basis. The elevator has 10 years of estimated life and that of air condition system is 20,000 operating hours. No residual values are attributed to any of the component parts. There were several events as following: (i) In 20X9, Rachel started to extend a new floor at the top of the building for meeting rooms. Total extension cost was 22,000. This project was finished in 31 December 20X9. (ii) At 01 September 20Y0, the AC system was partly damaged due to a fire accident and was repaired at a cost of 5,000. However, its remaining estimated life was shortened to 4,000 hours. Records about AC operating hours: - Accumulated operating hours to 31 August 20Y0: 12,000 hours - Operating hours from 01 January to 31 August 20Y0: 2,000 hours - Operating hours from 01 September to 31 December 20Y0: 250 hours. (iii) Annual maintenance cost for elevator incurred in 20Y0: 2,000. Required: 1/Show your solutions of PPE recognition and measurement at 01 January 20X7 with explanation? 2/Show your accounting treatments with costs incurred in those events given in the case with explanation? 3/Calculate the charges to P/L account in respect of the building and its parts for the year ended 31 December 20Y0. Rachel co. acquired an old 5-story building of 500,000 at cost and renovated it into a modern office building. Renovation costs and other details are as follows: -Renovation costs (i.e. repainting, floor replacing, windows/doors remodeling, ...): 20,000 - An elevator installed for the first time: 40,000 - New modern air condition system: 15,000. The office building was ready for intended use at 01 January 20X7 which being depreciated over 25 years by straight line basis. The elevator has 10 years of estimated life and that of air condition system is 20,000 operating hours. No residual values are attributed to any of the component parts. There were several events as following: (i) In 20X9, Rachel started to extend a new floor at the top of the building for meeting rooms. Total extension cost was 22,000. This project was finished in 31 December 20X9. (ii) At 01 September 20Y0, the AC system was partly damaged due to a fire accident and was repaired at a cost of 5,000. However, its remaining estimated life was shortened to 4,000 hours. Records about AC operating hours: - Accumulated operating hours to 31 August 20Y0: 12,000 hours - Operating hours from 01 January to 31 August 20Y0: 2,000 hours - Operating hours from 01 September to 31 December 20Y0: 250 hours. (iii) Annual maintenance cost for elevator incurred in 20Y0: 2,000. Required: 1/Show your solutions of PPE recognition and measurement at 01 January 20X7 with explanation? 2/Show your accounting treatments with costs incurred in those events given in the case with explanation? 3/Calculate the charges to P/L account in respect of the building and its parts for the year ended 31 December 20Y0.