During 2018, Ming’s Book Store paid $486,000 for land and built a store in Naperville, Illinois. Prior to construction, the city of Naperville charged Ming’s $1,000 for a building permit, which Ming’s paid. Ming’s also paid $15,000 for architect’s fees. The construction cost of $670,000 was financed by a long-term note payable, with interest costs of $28,020 paid at the completion of the project. The building was completed June 30, 2018. Ming’s depreciates the building using the straight-line method over 35 years, with estimated residual value of $330,000.
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 Ming’s plant assets on the company’s at December 31, 2018.
3. What will Ming’s income statement for the year ended December 31, 2018, report for this situation?A