# Question: Hulteen Hardware purchased a new building on January 1 2010

Hulteen Hardware purchased a new building on January 1, 2010, for \$1.5 million. The company expects the building to last twenty-five years and expects to be able to sell it then for \$150,000. During 2015, the building was painted at a cost of \$5,000. Almost ten years after acquiring the building, the roof was destroyed by a storm. The company had a new roof constructed at a cost of \$200,000. The new roof was completed on January 1, 2020, and it extended the estimated life of the building by five years, to a total of thirty years.
All other estimates are still accurate. Hulteen Hardware uses the straight-line method to depreciate the cost of all fixed assets.

REQUIRED:
a. Prepare the entry to record the purchase of the building, assuming that the company paid cash.
b. Prepare the entry to record the purchase of the new roof on January 1, 2020.
c. Prepare the entry to record depreciation expense for the year ended December 31, 2020.
d. Prepare the journal entry that would be recorded if the building was sold for \$1.2 million on December 31, 2025.

View Solution:

Sales0
Views113