Bonzo CoOwns a Building in Pennsylvania Required:
A

Bonzo Co.owns a building in Pennsylvania.The historical cost of the building is $1,050,000 and $540,000 of accumulated depreciation has been recorded to date.During 2015,Bonzo incurred the following expenses related to the building:
$\begin{array}{lr}\text { Repaired a broken water main } & \$ 81,500 \\\text { Major improvement to the HVAC system } & 75,000 \\\text { Added a 6,000 square foot employees' lounge } & 197,500 \\\text { Replaced the carpet in the purchasing department offices } & 21,300 \\\text { Repainted the building } & 25,000\end{array}$
Required:
a.Which of the building related costs incurred by Bonzo Co.should be capitalized in 2015?
b.What is the subsequent carrying amount of the building?

Correct Answer:

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