Accounting for Property, Plant and Equipment During the first few days of the year, Coast Company entered into the following transactions:

1. Purchased a parcel of land with a building on it for $900,000 cash on January 1 (Dec 31 fiscal year end company). The building, which will be used in operations, has an estimated useful life of 25 years and a salvage value of $60,000. Of the purchase price, $810,000 is allocated to the cost of the building, and the remaining balance to the land. On January 1, a new building entrance was constructed for $25,000.

a. Determine the acquisition cost associated with land, building, and depreciation expense for the building in the first year.

b. Calculate the depreciation expense for the year using straight-line depreciation for the building.