In March 2010, Hazlet Inc. (Hazlet) purchased a storage building for ($760,000.) The building was estimated to

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In March 2010, Hazlet Inc. (Hazlet) purchased a storage building for \($760,000.\) The building was estimated to have a useful life of 10 years and no residual value. In April 2016, Hazlet paid \($280,000\) to reinforce the building. By doing so, Hazlet extended its life by five years. In July 2016, part of the floor collapsed and had to be replaced to make the building usable. The work cost \($25,000.\) Hazlet’s year-end is February 28.

Required:

a. Provide the journal entry to record the purchase of the building in March 2010.

b. How would you account for the reinforcement done on the building in April 2016?

Explain your reasoning.

c. How would you account for the work done in July 2016? Explain.

d. What effect would the events in (b) and (c) have on Hazlet’s depreciation expense?

e. What would be the depreciation expense in each year of the equipments life, assuming that Hazlet uses straight-line depreciation?

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