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Bridge City Consulting bought a building and the land on which it is located for $155,000 cash. The land is estimated to represent 70 percent of the purchase price. The company paid $10,000 for building renovations before it was ready for use.
1. Prepare the journal entry to record all expenditures. Assume that all transactions were for cash and they occurred at the start of the year.
2. Compute straight-line depreciation on the building at the end of one year, assuming an estimated 10-year useful life and a $16,500 estimated residual value.
3. What should be the book value of the land and building at the end of year 2?
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The governing body of the Order decided that it was no longer feasible to operate the convent, which had been built about sixty years ago, so it was advertised locally for sale.
How should Symington have recorded this transaction? Anddiscuss ethical aspects of Symington's action.
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