Question
On March 1, 20X1, Delta Corporation purchased a building for $500,000 cash. The building has an estimated useful life of 25 years and no residual
On March 1, 20X1, Delta Corporation purchased a building for $500,000 cash. The building has an estimated useful life of 25 years and no residual value. Using the straight-line method, calculate the depreciation expense for the year 20X1.
Additionally, Delta Corporation made the following transactions during 20X1:
- April 15: Delta Corporation spent $20,000 on renovations to improve the building's functionality.
- July 1: Delta Corporation purchased furniture and fixtures for the building for $30,000.
- November 1: Delta Corporation incurred $5,000 in legal fees related to the acquisition of the building.
Furthermore, Delta Corporation provided the following information regarding its financial statements for the year 20X1:
| Date | Description | Amount |
|---|---|---|
| March 1 | Building purchase | $500,000 |
| April 15 | Renovations | $20,000 |
| July 1 | Furniture and fixtures | $30,000 |
| November 1 | Legal fees | $5,000 |
Required:
- Calculate the total depreciation expense for the year 20X1 for the building.
- Prepare the journal entries to record the building-related transactions for Delta Corporation during the year 20X1.
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
7th Canadian edition
1119368456, 978-1119211587, 1119211581, 978-1119320623, 978-1119368458
