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    This post addresses the Gonzo Co. questions.

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    Gonzo Co. owns a building in Georgia. The building's historical cost is $970,000, and $440,000 of accumulated depreciation has been recorded to date. During 2011, Gonzo incurred the following expenses related to the building.

    Repainted the building $48,000
    Major improvement to the plumbing 109,000
    Replaced carpet in the plant's accounting offices 47,600
    Added a 7,000 square foot lobby 234,600
    Repaired a broken water main 155,800

    1.) Which of the costs incurred by Gonzo Co. should be capitalized to the building account?

    2.) What is the subsequent carrying amount of the building?

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    https://brainmass.com/business/mergers-and-acquisitions/post-addresses-gonzo-co-questions-467098

    Solution Preview

    1.) Which of the costs incurred by Gonzo Co. should be capitalized to the building account?

    Major improvement to the plumbing 109,000
    Added a 7,000 ft. lobby 234,600

    The ...

    Solution Summary

    The solution provides the exact calculations needed to determine the capitalized costs to the building account for Gonzo Co. and the subsequent carrying amount of the building.

    $2.19

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