Zeidler Company bought a building and the land on which the building is located for a total cash price of $178,000. The company paid transfer costs of $2,000. Renovation costs on the building were $23,000. An independent appraiser provided market values for the land, $110,000, and building, $330,000 before renovation. Required: 1. Apportion the cost of the property on the basis of the appraised values. (Input all amounts as positive values.) Apportioned cost Renovation cost Purchase cost Item Building Land $ 0 $ 2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions were for cash and that all purchases 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.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Zeidler Company bought a building and the land on which the building is located for a total cash price of $178,000. The company paid
transfer costs of $2,000. Renovation costs on the building were $23,000. An independent appraiser provided market values for the
land, $110,000, and building, $330,000 before renovation.
Required:
1. Apportion the cost of the property on the basis of the appraised values. (Input all amounts as positive values.)
Item
Apportioned
cost
Renovation
cost
Purchase cost
Building
Land
$
2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions
were for cash and that all purchases 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
<
1
Record purchase of building and land.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
Record entry
Clear entry
View general journal
>
3. Compute depreciation of the building at the end of one year, using the straight-line method. Assume an estimated useful life of 12
years and an estimated residual value of $14,000.
Depreciation
4. What would be the carrying amount of the property (building and land) at the end of year 2?
Carrying amount
Z
tra
la
R
1.
B
Transcribed Image Text:Zeidler Company bought a building and the land on which the building is located for a total cash price of $178,000. The company paid transfer costs of $2,000. Renovation costs on the building were $23,000. An independent appraiser provided market values for the land, $110,000, and building, $330,000 before renovation. Required: 1. Apportion the cost of the property on the basis of the appraised values. (Input all amounts as positive values.) Item Apportioned cost Renovation cost Purchase cost Building Land $ 2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions were for cash and that all purchases 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 < 1 Record purchase of building and land. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal > 3. Compute depreciation of the building at the end of one year, using the straight-line method. Assume an estimated useful life of 12 years and an estimated residual value of $14,000. Depreciation 4. What would be the carrying amount of the property (building and land) at the end of year 2? Carrying amount Z tra la R 1. B
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