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Question: Passat Company owns a building that appears on its prior year-end balance sheet at its original $561,000 cost less $420,750 accumulated depreciation. The building is depreciated on a straight-line basis assuming a 20-year life and no salvage value. During the first week in January of the current calendar year, major structural repairs are completed on the building at a $67,200 cost. The repairs extend its useful life for 7 years beyond the 20 years originally estimated.
1. Determine the building's age (plant asset age) as of the prior year-end balance sheet date.
2. Prepare the entry to record the cost of the structural repairs that are paid in cash.
3. Determine the book value of the building immediately after the repairs are recorded.
4. Prepare the entry to record the current calendar year's depreciation.
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