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.

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.

3.	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