E9-2 Computing and Recording a Basket Purchase and Straight-Line Depreciation [L

ID: 2464812 • Letter: E

Question

E9-2 Computing and Recording a Basket Purchase and Straight-Line Depreciation [LO 9-2, L Bridge City Consulting bought a building and the land on which it is located for $175,000 cash The land is estimated to represent 70 percent of the purchase price. The company paid $20,000 for buildingpnovations before it was ready for use. Required: 2. Prepare the journal entry to record all expenditures. Assume that all transactions were for cash and they 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.) view transaction list view general journal Journal Entry Worksheet Record all expenditures for the land and buildings assuming all transactions were paid for with cash and occurred at the start of the year. Transaction General Journal DebitCredit Enter debits before credits done dear ent record entry

Explanation / Answer

Land 175,000 @70% = 122,500

Building 175,000 @30% = 52,500

Total 52,500 + 20,000 = 72,500 building cost

Journal entry

Land

122,500

Building

72,500

To Cash

$195,000

(3) (72,500 – 19,500)/10 = 5,300

(4) Book value = $184,400

( land 122,500 + Building 72,500 – (5300*2) }