During 2016, Chin\'s Book Store paid $488,000 for land and built a store in Lock

Question

During 2016, Chin's Book Store paid $488,000 for land and built a store in Lockport. Prior to construction, the city of Lockport charged Chin's $1,700 for a building permit, which Chin's paid. Chin's also paid $15,700 for architect's fees. The construction cost of $705,000 was financed by a long-term note payable, with interest cost of $30,040 paid at completion of the project. The building was completed June 30, 2016. Chin's depreciates the building by the straight-line method over 35 years, with estimated residual value of $340,000. Requirements 1. Journalize transactions for the following: a. Purchase of the land b. All the costs chargeable to the building in a single entry c. Depreciation on the building for 2016 Explanations are not required. Report Chin's Book Store's plant assets on the company's balance sheet at December 31, 2016. What will Chin's income statement for the year ended December 31, 2016, report for these facts? Print | Done Print Done

Explanation / Answer

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Chin's Book Store Journal Entries S.No. Date Description Ref Debit Credit 1 2016 Land    488,000.00 Bank/Payable    488,000.00 2 Building    752,440.00 Bank/Payable    752,440.00 3 Depreciation      11,784.00 Accumulated Depreciation      11,784.00

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