On 5/1/2007 Rice Corp. purchased a building for $450,000, paid closing costs of $14,000, and paid $26,000 to have the building prepared for use. During preparation for the new building, Rice Corp was able to sell salvaged materials to a salvage company for $7,500 in cash. Management of Rice Corp. estimates that the building will have a useful life of 20 years (the asset will be used through 4/30/2026) and a salvage value of $65,000. The company depreciates its buildings using double-declining balance.

Record the 5/1/2007 journal entry for the purchase of the building. What amount will Rice record as a debit to building?

a. $464,000.

b. $425,000.

c. $468,500.

d. $443,500.

e. $410,000.

f. $482,500.

g. $497,500.

h. None of the above.

Assume that Rice Corp. originally recorded the building at a cost of $500,000. On 7/1/2013 Rice Corp. sells the building for $300,000. Record the journal entry for this transaction. What is the gain or loss Rice will record related to this sale? Round all calculations to the nearest dollar.

a. Loss of $47,750.

b. Gain of $60,852.

c. Gain of $38,216.

d. Gain of $72,248.

e. Gain of $47,566.

f. Gain of $28,867.

g. Loss of $200,000.

h. None of the above.

Please show as much work as possible, especially on the second part of the question. Thank you!