{"id":192650,"date":"2025-02-18T05:46:22","date_gmt":"2025-02-18T05:46:22","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=192650"},"modified":"2025-02-18T05:46:24","modified_gmt":"2025-02-18T05:46:24","slug":"classify-each-of-the-following-as-aordinary-maintenance-and-repairs-b-asset-improvements-or-cextraordinary-repairs","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/02\/18\/classify-each-of-the-following-as-aordinary-maintenance-and-repairs-b-asset-improvements-or-cextraordinary-repairs\/","title":{"rendered":"Classify each of the following as Aordinary maintenance and repairs, B asset improvements, or Cextraordinary repairs"},"content":{"rendered":"\n<p>Classify each of the following as Aordinary maintenance and repairs, B asset improvements, or Cextraordinary repairs.<\/p>\n\n\n\n<p>Resurfacing a pool in an apartment building. <strong><em><strong><em>_______<\/em><\/strong><\/em><\/strong><br>Installing a new air conditioner in an old building. <strong><em><strong><em>_______<\/em><\/strong><\/em><\/strong><br>Exterior and interior painting. <strong><em><strong><em>_______<\/em><\/strong><\/em><\/strong><br>Fixing damage due to a car accident. <strong><em><strong><em>_______<\/em><\/strong><\/em><\/strong><br>PROBLEM #2 14 points<\/p>\n\n\n\n<p>Equipment acquired at a cost of $126,000 and has a book value of $42,000. Journalize the disposal of equipment under the following independentassumptions. Identify each assumption by letter.<\/p>\n\n\n\n<p>(a)<\/p>\n\n\n\n<p>The equipment had no market value and was discarded.<\/p>\n\n\n\n<p>(b)<\/p>\n\n\n\n<p>The equipment is sold for $53,000.<\/p>\n\n\n\n<p>(c)<\/p>\n\n\n\n<p>The equipment is sold for $27,000.<\/p>\n\n\n\n<p>(d)<\/p>\n\n\n\n<p>The equipment is traded-in for a similar asset. The list price of the new equipment is $63,000. The exchange has no commercial substance.<\/p>\n\n\n\n<p>Journal<\/p>\n\n\n\n<p>Date<\/p>\n\n\n\n<p>Description<\/p>\n\n\n\n<p>Debit<\/p>\n\n\n\n<p>Credit<\/p>\n\n\n\n<p>PROBLEM #3 22 points<\/p>\n\n\n\n<p>An asset was purchased January 1, 20XX and the fiscal year ends December 31st. Calculate depreciation expense, accumulated depreciation, and net book value under the straight-line and the double declining balance methods. Round your answers to the nearest whole dollar.<\/p>\n\n\n\n<p>Asset Cost = $200,000 Salvage Value = $25,000 Estimated Life = 8 Years<\/p>\n\n\n\n<p>Straight-line method:<\/p>\n\n\n\n<p>Year<\/p>\n\n\n\n<p>Depreciation Expense<\/p>\n\n\n\n<p>Accumulated Depreciation<\/p>\n\n\n\n<p>Net Book Value<\/p>\n\n\n\n<p>20XX<\/p>\n\n\n\n<p>20X1<\/p>\n\n\n\n<p>20X2<\/p>\n\n\n\n<p>20X3<\/p>\n\n\n\n<p>20X4<\/p>\n\n\n\n<p>20X5<\/p>\n\n\n\n<p>20X6<\/p>\n\n\n\n<p>20X7<\/p>\n\n\n\n<p>Double Declining Balance method:<\/p>\n\n\n\n<p>Year<\/p>\n\n\n\n<p>Depreciation Expense<\/p>\n\n\n\n<p>Accumulated Depreciation<\/p>\n\n\n\n<p>Net Book Value<\/p>\n\n\n\n<p>20XX<\/p>\n\n\n\n<p>20X1<\/p>\n\n\n\n<p>20X2<\/p>\n\n\n\n<p>20X3<\/p>\n\n\n\n<p>20X4<\/p>\n\n\n\n<p>20X5<\/p>\n\n\n\n<p>20X6<\/p>\n\n\n\n<p>20X7<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>Here are the solutions for your McGraw Hill Connect Chapter 10 assignment:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Problem #1: Classify the following items<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Resurfacing a pool in an apartment building<\/strong>: <strong>B) Asset improvements<\/strong><br>This is considered an improvement to the property, increasing its value or extending its useful life.<\/li>\n\n\n\n<li><strong>Installing a new air conditioner in an old building<\/strong>: <strong>B) Asset improvements<\/strong><br>A new air conditioner in an old building improves the overall value of the building and its amenities.<\/li>\n\n\n\n<li><strong>Exterior and interior painting<\/strong>: <strong>A) Ordinary maintenance and repairs<\/strong><br>Painting is generally considered a regular maintenance task to keep the building in good condition, not a value-enhancing improvement.<\/li>\n\n\n\n<li><strong>Fixing damage due to a car accident<\/strong>: <strong>C) Extraordinary repairs<\/strong><br>This is an extraordinary repair as it involves restoring the asset to its original condition after damage due to an unexpected event.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Problem #2: Journal Entries for Equipment Disposal<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assumption (a): Equipment had no market value and was discarded.<\/strong><\/li>\n<\/ul>\n\n\n\n<pre class=\"wp-block-code\"><code>  Date       | Description                          | Debit      | Credit\n  ---------------------------------------------------------------------------\n  04\/28\/2013 | Loss on Disposal of Equipment         | 42,000     |\n             | Accumulated Depreciation             | 84,000     |\n             | Equipment                             |            | 126,000<\/code><\/pre>\n\n\n\n<p><strong>Explanation<\/strong>: The asset is discarded with no market value. The entire book value is written off, and the accumulated depreciation is removed from the books.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assumption (b): Equipment is sold for $53,000.<\/strong><\/li>\n<\/ul>\n\n\n\n<pre class=\"wp-block-code\"><code>  Date       | Description                          | Debit      | Credit\n  ---------------------------------------------------------------------------\n  04\/28\/2013 | Cash                                  | 53,000     |\n             | Accumulated Depreciation             | 84,000     |\n             | Equipment                             |            | 126,000\n             | Gain on Disposal of Equipment         | 11,000     |<\/code><\/pre>\n\n\n\n<p><strong>Explanation<\/strong>: The equipment is sold for more than its book value, so the difference is recorded as a gain.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assumption (c): Equipment is sold for $27,000.<\/strong><\/li>\n<\/ul>\n\n\n\n<pre class=\"wp-block-code\"><code>  Date       | Description                          | Debit      | Credit\n  ---------------------------------------------------------------------------\n  04\/28\/2013 | Cash                                  | 27,000     |\n             | Accumulated Depreciation             | 84,000     |\n             | Equipment                             |            | 126,000\n             | Loss on Disposal of Equipment         | 15,000     |<\/code><\/pre>\n\n\n\n<p><strong>Explanation<\/strong>: The equipment is sold for less than its book value, so the difference is recorded as a loss.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assumption (d): Equipment is traded-in for a similar asset.<\/strong><\/li>\n<\/ul>\n\n\n\n<pre class=\"wp-block-code\"><code>  Date       | Description                          | Debit      | Credit\n  ---------------------------------------------------------------------------\n  04\/28\/2013 | Equipment (New Asset)                | 63,000     |\n             | Accumulated Depreciation             | 84,000     |\n             | Equipment                             |            | 126,000\n             | No Gain or Loss (Exchange with no commercial substance) |<\/code><\/pre>\n\n\n\n<p><strong>Explanation<\/strong>: Since the exchange has no commercial substance, no gain or loss is recognized. The new asset is recorded at the list price of $63,000.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Problem #3: Depreciation Calculations<\/h3>\n\n\n\n<p>Given:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Asset Cost = $200,000<\/li>\n\n\n\n<li>Salvage Value = $25,000<\/li>\n\n\n\n<li>Estimated Life = 8 years<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Straight-Line Method:<\/h4>\n\n\n\n<p>Depreciation Expense = (Cost &#8211; Salvage Value) \/ Useful Life<br>Depreciation Expense = ($200,000 &#8211; $25,000) \/ 8 = $21,875 per year.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Year<\/th><th>Depreciation Expense<\/th><th>Accumulated Depreciation<\/th><th>Net Book Value<\/th><\/tr><\/thead><tbody><tr><td>20XX<\/td><td>$21,875<\/td><td>$21,875<\/td><td>$178,125<\/td><\/tr><tr><td>20X1<\/td><td>$21,875<\/td><td>$43,750<\/td><td>$156,250<\/td><\/tr><tr><td>20X2<\/td><td>$21,875<\/td><td>$65,625<\/td><td>$134,375<\/td><\/tr><tr><td>20X3<\/td><td>$21,875<\/td><td>$87,500<\/td><td>$112,500<\/td><\/tr><tr><td>20X4<\/td><td>$21,875<\/td><td>$109,375<\/td><td>$90,625<\/td><\/tr><tr><td>20X5<\/td><td>$21,875<\/td><td>$131,250<\/td><td>$68,750<\/td><\/tr><tr><td>20X6<\/td><td>$21,875<\/td><td>$153,125<\/td><td>$46,875<\/td><\/tr><tr><td>20X7<\/td><td>$21,875<\/td><td>$175,000<\/td><td>$25,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\">Double Declining Balance Method:<\/h4>\n\n\n\n<p>Depreciation Expense = 2 x (1 \/ Useful Life) x Book Value at Beginning of Year<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Year<\/th><th>Depreciation Expense<\/th><th>Accumulated Depreciation<\/th><th>Net Book Value<\/th><\/tr><\/thead><tbody><tr><td>20XX<\/td><td>$50,000<\/td><td>$50,000<\/td><td>$150,000<\/td><\/tr><tr><td>20X1<\/td><td>$37,500<\/td><td>$87,500<\/td><td>$112,500<\/td><\/tr><tr><td>20X2<\/td><td>$28,125<\/td><td>$115,625<\/td><td>$84,375<\/td><\/tr><tr><td>20X3<\/td><td>$21,094<\/td><td>$136,719<\/td><td>$63,281<\/td><\/tr><tr><td>20X4<\/td><td>$15,813<\/td><td>$152,531<\/td><td>$47,469<\/td><\/tr><tr><td>20X5<\/td><td>$11,805<\/td><td>$164,336<\/td><td>$35,664<\/td><\/tr><tr><td>20X6<\/td><td>$8,298<\/td><td>$172,634<\/td><td>$27,366<\/td><\/tr><tr><td>20X7<\/td><td>$5,586<\/td><td>$178,220<\/td><td>$21,780<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>These are the detailed answers for the problems you provided. Let me know if you need any further clarification or if you&#8217;d like to see the calculations graphically!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Classify each of the following as Aordinary maintenance and repairs, B asset improvements, or Cextraordinary repairs. Resurfacing a pool in an apartment building. _______Installing a new air conditioner in an old building. _______Exterior and interior painting. _______Fixing damage due to a car accident. _______PROBLEM #2 14 points Equipment acquired at a cost of $126,000 and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-192650","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/192650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=192650"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/192650\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=192650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=192650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=192650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}