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Building Purchase and Depreciation Summary

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racheli7252
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12 views3 pages

Building Purchase and Depreciation Summary

Uploaded by

racheli7252
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Homework 10

Purchase Price of Building $1,200,000.00


Real Estate Commissions $25,000.00
Legal Fees $40,000.00
Tax Lien Owed by Prior Owne $15,000.00 (Must be paid or satisfied by buyer)
Paid Landscaper for clean-up $5,000.00

a. Total Cost of Building $1,285,000.00


b.
JOURNAL
Account Name Debit Credit
Building $ 1,200,000.00
Cash $ 1,200,000.00
Real Estate Commission $ 25,000.00
Cash $ 25,000.00
Closing Cost $ 40,000.00
Cash $ 40,000.00
Prior Owner Tax $ 15,000.00
Cash $ 15,000.00
Landscaping $ 5,000.00
Cash $ 5,000.00

c. Annual Depreciation
Purchase price-salvage divided by years
$1,100,000.00 $ 55,000.00

d.
JOURNAL
Account Name Debit Credit
Depreciation Expense $ 55,000.00
Accumulated Depreciation-Building $ 55,000.00

e.
Cost of Building $1,200,000.00
Less: Accumulated Depreciation $ 660,000.00
Book Value $540,000.00
Proceeds from Sale $ 600,000.00
Gain on Disposal of Plant As $ 60,000.00

f.
JOURNAL
Account Name Debit Credit
Cash $ 600,000.00
Accumulated Depreciation $ 660,000.00
Building $ 1,200,000.00
Gain on Dispoasl of Plant Asset $ 60,000.00
Totals ### ###
isfied by buyer)

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