Willy Wonka Chocolate Factory has been around since 1971 (it is currently 2021). The machines...
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Accounting
Willy Wonka Chocolate Factory has been around since 1971 (it is currently 2021). The machines still work but the repairs are getting pretty serious. The original cost of the factory was $1,000,000 and the useful life was 25 years and the depreciation method is straight line.
During 2021, Willy committed to the following expenditures:
a) Due to increase demand in everlasting gobstoppers, the company built a $200,000 new wing of the factory to increase their capacity to produce gobstoppers.
b) The Ooompa Loompas oily skin requires all the walls (below 4 feet) to be repainted at a cost of $40,000.
c) Augustus Gloop tried to step on a platform labeled "No standing" and it broke. Getting it working again cost $20,000 in materials.
1. Indicate how each of the 3 expenditures above would be recorded in the accounting records
2. What is the book value of the factory before these expenditures? What is the book value after?
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