(Learning Objectives 1, 3: Measure, depreciate, and report plant assets) During2018, Ming’s Book Store paid $486,000 for land and built a store in Naperville, Illinois.Prior to construction, the city of Naperville charged Ming’s $1,000 for a building permit,which Ming’s paid. Ming’s also paid $15,000 for architect’s fees. The construction cost of$670,000 was financed by a long-term note payable, with interest costs of $28,020 paid atthe completion of the project. The building was completed June 30, 2018. Ming’s depreciatesthe building using the straight-line method over 35 years, with estimated residual value of$330,000.1. Journalize transactions for the following (explanations are not required):a. Purchase of the landb. All the costs chargeable to the building in a single entryc. Depreciation on the building for 20182. Report Ming’s plant assets on the company’s balance sheet at December 31, 2018.3. What will Ming’s income statement for the year ended December 31, 2018, report for thissituation?

Question

(Learning Objectives 1, 3: Measure, depreciate, and report plant assets) During
2018, Ming’s Book Store paid $486,000 for land and built a store in Naperville, Illinois.
Prior to construction, the city of Naperville charged Ming’s $1,000 for a building permit,
which Ming’s paid. Ming’s also paid $15,000 for architect’s fees. The construction cost of
$670,000 was financed by a long-term note payable, with interest costs of $28,020 paid at
the completion of the project. The building was completed June 30, 2018. Ming’s depreciates
the building using the straight-line method over 35 years, with estimated residual value of
$330,000.
1. Journalize transactions for the following (explanations are not required):
a. Purchase of the land
b. All the costs chargeable to the building in a single entry
c. Depreciation on the building for 2018
2. Report Ming’s plant assets on the company’s balance sheet at December 31, 2018.
3. What will Ming’s income statement for the year ended December 31, 2018, report for this
situation?

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