(Learning Objective 1, 2: Measuring, depreciating, and reporting plant assets) During 20X4, Golden Book Store paid $480,000 for land and built a store in Chicago. Prior to construction, the city of Chicago charged Golden $1,000 for a building permit, which Golden paid. Golden also paid $15,000 for architect’s fees. The construction cost of $660,000 was financed by a long term note payable, with interest cost of $39,000 paid at completion of the project. The building was completed September 30, 20X4. Golden depreciates the building by the straight line method over 35 years, with estimated residual value of $330,000.
1. Journalize transactions for
a. Purchase of the land
b. All the costs chargeable to the building in a single entry
c. Depreciation on the building Explanations are not required.
2. Report Golden Book Store’s plant assets on the company’s balance sheet at December 31, 20X4.
3. What will Golden’s income statement for the year ended December 31, 20X4, report for this situation?