K-Delta Company bought a building for $71,000 cash and the land on which it was located for $107,000 cash. The company paid transfer costs of $9,000 ($3,000 for the building and $6,000 for the land). Renovation costs on the building were $23,000.

4.

value:
4.76 points

Required:

1.	Prepare the journal entry to record the purchase of the property, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select) Cash Accounts payable Notes payable Accumulated depreciation Land Building Depreciation expense Common stock
(Click to select) Accounts payable Common stock Land Building Depreciation expense Accumulated depreciation Cash Notes payable
(Click to select) Accumulated depreciation Common stock Land Depreciation expense Notes payable Cash Building Accounts payable

rev: 04-06-2011

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5.

value:
4.76 points

2.	Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $15,000 estimated residual value. (Omit the "$" sign in your response.)

Straight-line depreciation

$

rev: 04-06-2011

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6.

value:
4.76 points

3.	What would be the net book value of the property (land and building) at the end of year 2? (Omit the "$" sign in your response.)

Net book value

$

rev: 04-06-2011