On January 1, 2023, Amanda company acquires a new building for $870,000,000 cash. The building will...

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On January 1, 2023, Amanda company acquires a new building for $870,000,000 cash. The building will be used as a showroom. The company also spent $120,000 in legal fees to transfer the property of the building, and $78,000 in non-refundable taxes. They aslo added a new wing to the building to be able to use it as a showroom. The new construction cost a total of $340,000, paid for in cash. The company has always dimantled its showrooms at the end of their useful life. This new showroom has a useful life of 15 years. The asset retirement obligation cost is estimated to $100,320,000. The discount rate is 6%. Required a) Prepare the journal entry to record the acquisition of the building on January 1, 2023, assuming cash is used to pay for the asset's related costs (other than the ARO). b) The building has a residual value of $50,000,000 and is depreciated using the straight-line method. Prepare the required adjusting entries related to the building depreciation and to the ARO interest on December 31, 2023 and December 31, 2024. c) Assume that on January 1, 2030, the asset's retirement costs are re-estimated to $150,000,000, while the asset total useful life is extended to 20 years. The discount rate to be used is still 6%. Prepare the journal entry to record this change on January 1, 2030. d) Calculate the revised depreciation expense to be recorded on December 31, 2030 (no journal entry required). On January 1, 2023, Amanda company acquires a new building for $870,000,000 cash. The building will be used as a showroom. The company also spent $120,000 in legal fees to transfer the property of the building, and $78,000 in non-refundable taxes. They aslo added a new wing to the building to be able to use it as a showroom. The new construction cost a total of $340,000, paid for in cash. The company has always dimantled its showrooms at the end of their useful life. This new showroom has a useful life of 15 years. The asset retirement obligation cost is estimated to $100,320,000. The discount rate is 6%. Required a) Prepare the journal entry to record the acquisition of the building on January 1, 2023, assuming cash is used to pay for the asset's related costs (other than the ARO). b) The building has a residual value of $50,000,000 and is depreciated using the straight-line method. Prepare the required adjusting entries related to the building depreciation and to the ARO interest on December 31, 2023 and December 31, 2024. c) Assume that on January 1, 2030, the asset's retirement costs are re-estimated to $150,000,000, while the asset total useful life is extended to 20 years. The discount rate to be used is still 6%. Prepare the journal entry to record this change on January 1, 2030. d) Calculate the revised depreciation expense to be recorded on December 31, 2030 (no journal entry required).

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a Journal entry to record the acquisition of the building on January 1 2023 Date January 1 2023 Debi... View the full answer