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What is the book value of the factory

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Question - Jasmine's Chocolate Factory has been around since 1971 (it is currently 2021). The machines still work but the repairs are getting pretty serious. The original cost of the factory was $1,000,000 and the useful life was 25 years and the depreciation method is straight line.

During 2021, Jasmine committed to the following expenditures:

- Due to increase demand in dark chocolate the company built a $200,000 new wing of the factory to increase their capacity to produce dark chocolate.

- The factory's last inspection requires all the walls to be repainted at a cost of $40,000.

- An employee tried to step on a platform labeled "No standing" and it broke. Getting it working again cost $20,000 in materials.Instructions:

1. Indicate how each of the 3 expenditures above would be recorded in the accounting records?

2. What is the book value of the factory before these expenditures? What is the book value after?

Reference no: EM132831913

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