Answer the following IThe following information applies to t

Answer the following:

IThe following information applies to the questions displayed below/ Bridge City Consulting bought a building and the land on which it is located for $200.000 cash. The land is estimated to represent 60 percent of the purchase price The company paid $30,000 for bullding renovations 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 Journal entry worksheet Record all expenditures for the land and buildings assurning all transactions were paid for with cash and occurred at the start of the year Note: Enter debits before credits. ransaction General Journal De Credit Record entry Clear entry View general journal

Solution

Answer:

2

Description

Debit $

Credit $

Land (230,000*60%)

138000

Building (230,000*40%)

92000

Cash (200,000+30,000)

230,000

_____________________________________

3

straight-line depreciation on the building at the end of one year,

straight-line depreciation

=92000-23000 / 10 year

=69000 /10

=$6900 depreciation

straight-line depreciation on the building at the end of one year =$6900

_______________________________________

4

What should be the book value of the land and building at the end of year 2

Land

138000

Add:

Building

92000

Less: Depreciation on building

year 1 depreciation

6900

year 2 depreciation

6900

Net value of building at end of year 2

78200

Total value of land and building

216200

Land

138000

Building

78200

Description	Debit $	Credit $
Land (230,000*60%)	138000
Building (230,000*40%)	92000
Cash (200,000+30,000)		230,000