-Bridge City Consulting bought a building and the land on which it is located for $195,000 cash. The land is estimated to represent 70 percent of the purchase price. The company paid $20,000 for building renovations before it was ready for use. please record the journal entry.
-Compute straight-line depreciation on the building at the end of one year, assuming an estimated 10-year useful life and a $21,500 estimated residual value. (Do not round intermediate calculations.)
-What should be the book value of (a) the land and (b) the building at the end of year 2?
QUESTION 2
At the beginning of the year, Oakmont Company bought three used machines from American Manufacturing, Inc. The machines immediately were overhauled, were installed, and started operating. Because the machines were different, each was recorded separately in the accounts.
| Machine A |
Machine B |
Machine C |
| Amount paid for asset |
$20,800 |
$11,300 |
$11,000 |
|
| Installation costs |
900 |
500 |
400 |
|
| Renovation costs prior to use |
700 |
300 |
800 |
|
| Repairs after production began |
620 |
2,100 |
680 |
By the end of the first year, each machine had been operating 4,000 hours.
Required:
1. Compute the cost of each machine.