Question

Required information E9-2 Computing and Recording a Basket Purchase and Straight-Line Depreciation (LO 9-2, LO 9-3) [The following information applies to the questions displayed below.) Bridge City Consulting bought a building and the land on which it is located for $205,000 cash. The land is estimated to represent 50 percent of the purchase price. The company paid $10,000 for building renovations before it was ready for use. E9-2 Part 2 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 assuming all transactions were paid for with cash and occurred at the start of the year. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Answer 1

2) Journal entry Account and explanation Land (205,000x50%) Building (205,000x50%+10,000) Debit Date Credit 102,500 112,500 215,000 Cash (To record purchase assets) 3) Straight line depreciation = (112,500 - 21,500) /10 9,100 4a) Book value of land at the end of year 2= 102,500 4b) Book value of building at the end of year 2 112,500-9,100-9,100= 94,300