Brigadoon Consulting bought a building and the land on which it is located for $$185,000$ cash. The land is estimated to represent $70$ percent of the purchase price. The company paid $$25,000$ for building renovations before it was ready for use.

Required:

$1.$ The renovation costs should be capitalized.

multiple choice

False

True

$2.$ Prepare the journal entry to record all expenditures. Assume that all transactions were for cash and they occurred at the start of the year. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

$3.$ Compute straight$-$line depreciation on the building at the end of one year, assuming an estimated twelve$-$year useful life and a $$4,900$ estimated residual value.

$4.$ What should be the book value of the land and building at the end of year $2?$