During 2018, Chang’s Book Store paid $481,000 for land and built a store in Newark, New Jersey. Prior to construction, the city of Newark charged Chang’s $1,200 for a building permit, which Chang’s paid. Chang’s also paid $15,200 for architect’s fees. The construction cost of $679,900 was financed by a long-term note payable, with interest costs of $28,180 paid at the completion of the project. The building was completed June 30, 2018. Chang’s depreciates the building using the straight-line method over 35 years, with estimated residual value of $335,000.
1. Journalize transactions for the following (explanations are not required):
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a. Purchase of the land
b. All the costs chargeable to the building in a single entry
c. Depreciation on the building for 2018
2. Report Chang’s plant assets on the company’s at December 31, 2018.
3. What will Chang’s income statement for the year ended December 31, 2018, report for these facts?