Houston’s Shredding Service has just completed a minor repair on a shredding mac

Question

Houston’s Shredding Service has just completed a minor repair on a shredding machine. The repair cost was $780, and the book value prior to the repair was $4,940. In addition, the company spent $8,500 to replace the roof on a building. The new roof extended the life of the building by five years. Prior to the roof replacement, the general ledger reflected the Building account at $86,500 and related Accumulated Depreciation account at $37,800.

After the work was completed, what book value should Houston’s report on the balance sheet for the shredding machine and the building?

Shredding Machine = $4,940

Building= ?

Houston’s Shredding Service has just completed a minor repair on a shredding machine. The repair cost was $780, and the book value prior to the repair was $4,940. In addition, the company spent $8,500 to replace the roof on a building. The new roof extended the life of the building by five years. Prior to the roof replacement, the general ledger reflected the Building account at $86,500 and related Accumulated Depreciation account at $37,800.

Explanation / Answer

Building account=$86,500+$8,500=$95,000

Accumulated Depreciation account at=$37,800

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