2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactionswere for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field.)NoTransactionDepreciationGeneral JournalDebit3. Compute depreciation of the building at the end of one year, using the straight-line method. Assume an estimated useful life of 12years and an estimated residual value of $14,800.Carrying amountCredit4. What would be the carrying amount of the property (building and land) at the end of year 2? E8-4 Computing and Recording Cost and Depreciation of Assets in a Basket Purchase (Straight-LineDepreciation) LO8-2, 8-3Zeidler Company bought a building and the land on which the building is located for a total cash price of $182,000. The company paidtransfer costs of $2,800. Renovation costs on the building were $34,960. An independent appraiser provided market values for theland, $190,000, and building, $760,000 before renovation.Required:1. Apportion the cost of the property on the basis of the appraised values. (Input all amounts as positive values.)ItemBuildingLandNoApportioned RenovationcostcostAnswer is complete and correct.$$ 147,840✔ S 34,960 S36,960✔184,800TransactionPurchase costS2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactionswere for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field.)General Journal182,800✔36.960219,760DebitCredit

Name: 2. Prepare the journal entry to record the purchase of the building a
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: 2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactionswere for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/

Introduction: Depreciation is an accounting concept for allocating the cost of a tangible or…

Business

Accounting

2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction Depreciation General Journal Debit 3. Compute depreciation of the building at the end of one year, using the straight-line method. Assume an estimated useful life of 12 years and an estimated residual value of $14,800. Carrying amount Credit 4. What would be the carrying amount of the property (building and land) at the end of year 2?

2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction Depreciation General Journal Debit 3. Compute depreciation of the building at the end of one year, using the straight-line method. Assume an estimated useful life of 12 years and an estimated residual value of $14,800. Carrying amount Credit 4. What would be the carrying amount of the property (building and land) at the end of year 2?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 33BE: Expenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a...

See similar textbooks

Similar questions

Expenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a minor part of an air conditioning system. b. Paid $40,000 to fix structural damage to a building. c. Paid $8,000 for monthly salaries. d. Paid $12,000 to replace a manual cutting machine with a computer-controlled machine. e. Paid $1,000 related to the annual painting of a building. Required: Classify each transaction as either a revenue expenditure, a capital expenditure, or neither.
Allocating payments and receipts to fixed asset accounts The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. A. Fee paid to attorney for title search............................................ 3,600 B. Cost of real estate acquired as a plant site: Land................................ 720,000 Building (to be demolished)........... 60,000 C. Finder's fee paid to real estate agency.......................................... 23,400 D. Delinquent real estate taxes on property, assumed by purchaser................. 15,000 E. Architect's and engineer's fees for plans for new building....................... 75,000 F. Cost of removing building purchased with land in (B)............................ 10,000 G. Proceeds from sale of salvage materials from old building....................... 3,400 H. Cost of filling and grading land................................................ 18,000 1. Premium on one-year insurance policy during construction...................... 8,400 J. Money borrowed to pay building contractor.................................... 800,000 K. Special assessment paid to city for extension of water main to the property....... 13,400 L. Cost of repairing windstorm damage during construction....................... 3,000 M. Cost of repairing vandalism damage during construction........................ 2,000 N. Cost of trees and shrubbery planted........................................... 14,000 0. Cost of paving parking lot to be used by customers............................. 21,600 P. Interest incurred on building loan during construction.......................... 40,000 Q. Proceeds from insurance company for windstorm and vandalism damage........ 4,500 R. Payment to building contractor for new building................................ 800,000 S. Refund of premium on insurance policy (1) canceled after 10 months............. 1,400 Instructions 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: Item Land Land Improvements Building Other Accounts 2. Determine the amount debited to Land. Land Improvements, and Building. 3. The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation. 4. What would be the effect on the income statement and balance sheet if the cost of paving the parking lot of 21,600 [payment (0)] was incorrectly classified as Land rather than Land Improvements? Assume Land Improvements are depreciated over a 10-year life using the double-declining-balance method.
On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on April 1, Year 1. Calculate the depreciation for Year 1 and Year 2 using the double-declining-balance method. Round to the nearest dollar.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.