[The following information applies to the questions displayed below.] Bridge Cit

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[The following information applies to the questions displayed below.]

Bridge City Consulting bought a building and the land on which it is located for $115,000 cash. The land is estimated to represent 50 percent of the purchase price. The company paid $8,000 for building renovations before it was ready for use.

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.)

Record all expenditures for the land and buildings assuming all transactions were paid for with cash and occurred at the start of the year.

Compute straight-line depreciation on the building at the end of one year, assuming an estimated 10-year useful life and a $2,000 estimated residual value. (Do not round intermediate calculations.)

Bridge City Consulting bought a building and the land on which it is located for $115,000 cash. The land is estimated to represent 50 percent of the purchase price. The company paid $8,000 for building renovations before it was ready for use.

Explanation / Answer

land cost       (115000*50%)= 57500 Building cost (57,500+8,000)= 65500 1) Journal entry accounting titles & Explanations Debit Credit Land 57,500 Buildings 65,500 cash 123,000 3) Straight line depreciation (65,500 - 2000)/10 6350 4) Book value of a) land 57,500 b) Building (65,500-6350*2) 52800

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