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 $210,000. 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 $790,000. The new wing substantially increases the productive capacity of the plant. 3. Annual building maintenance was performed at a cost of $16,500. 4. All of the equipment on the assembly line in the plant was rearranged at a cost of $44,000. The re-arrangement clearly increases the productive capacity of the plant.Required: Prepare journal entries to record each of the above expenditures.

Answer 1

S/N Journal Entries Debit Credit

1 Accumulated depreciation-Building $210,000

Cash $210,000

2 Building $790,000

Cash $790,000

3 Maintenance expense $16,500

Cash $16,500

4 Equipment $44,000

Cash $44,000