Question

Belltone Company made the following expenditures related to its 10-year-old manufacturing facility:

1. The heating system was replaced at a cost of $205,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation.
2. A new wing was added at a cost of $780,000. The new wing substantially increases the productive capacity of the plant.
3. Annual building maintenance was performed at a cost of $15,500.
4. All of the machinery on the assembly line in the plant was rearranged at a cost of $42,000. The rearrangement clearly increases the productive capacity of the plant. Required: Prepare journal entries to record each of the above expenditures. (If no entry is required for a particular event, select "No journal entry required" in the first account field.)

Answer 1

Acc dep - manufacturing facility 205,000 debit

Cash 205,000 credit

--to record cost heating system--

Wing 780,000 debit

Cash 780,000 credit

--to reocrd addition of a new wing--

maintenance expense 15,500 debit

cash 15,500 credit

--to record maintenance expense for the period

Assembly line 42,000 debit

Cash 42,000 credit

--to record new assembly line--

Step-by-step explanation:

1.- the improvements will decrease the accumulated depreciation

2.- The wing will be considered a new asset and depreciate separately

3.- the maintenance cost is cost of the period as it do not upgrade or change the productivity is a cost to maintain the current level.

4.- the assembly line will be reocgnize as an asset as increase the productive capaictive of the plant