E9-2 Computing and Recording a Basket Purchase and Straight-Line Depreciation [LO9-2, LO9-3] Brigadoon Consulting bought a building and the land on which it is located for $181,000 cash. The land is estimated to represent 70 percent of the purchase price. The company paid $21,000 for building renovations before it was ready for use.

1. The renovation costs should be capitalized. multiple choice True False

2. Prepare the journal entry to record all expenditures. Assume

3. Compute straight-line depreciation on the building at the end of one year, assuming an estimated twelve-year useful life and a $4,500 estimated residual value. depreciation____

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