During 2010, Tao Book Store paid $488,000 for land and built a store in Detroit. Prior to construction, the city of Detroit charged Tao $1,800 for a building permit, which Tao paid. Tao also paid $15,800 for architect’s fees. The construction cost of $710,000 was financed by a long-term note payable, with interest cost of $30,180 paid at completion of the project. The building was completed September 30, 2010. Tao depreciates the building by the straight-line method over 35 years, with estimated residual value of $341,000.

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 Tao Book Stores plant assets on the company’s balance sheet at December 31, 2010.

3. What will Taos income statement for the year ended December 31, 2010, report for this situation?