Response to the following problem:
A factory with original cosr of $450,000 and an expected useful life of thirty years has been depreciated using the straight-line method for twenty years (no scrap value). The roof of the building is replaced at " cost of $45,000 after the twentieth year, and it is expected to extend the useful life of the structure by five years.
Determine:
1. The annual depreciation recognized per year prior to the capital l improvement.
2. The accumulated depreciation Over the twenty years,
3. The entry to record the capital improvement.
4. The book value of the building prior to the capital improvement.
5. The hook value of the building efeer the capital improvement.
6. The depreciation expense to be recognized annually as result of the capital irnprovernenr. (Life extended five years.)