During 2017, Roberts Inc. paid $200,000 for land and built a restaurant in Collingwood, Ontario. Prior to construction, the City of Collingwood charged Roberts Inc. $2,250 for a building permit, which Roberts Inc. paid. Roberts Inc. also paid $20,000 for architect’s fees. The construction cost of $700,000 was financed by a long-term note payable issued on January 1, 2017, with interest cost of $29,000 paid at December 31, 2017. The building was completed September 30, 2017. Roberts Inc. will depreciate the building by the straight-line method over 25 years, with an estimated residual value of $60,000.
1. Journalize transactions for the following (explanations are not required):
a. Purchase of the land
b. All the costs chargeable to the building, in a single entry
c. Depreciation on the building
2. Report this transaction in the Property, Plant, and Equipment on the company’s balance sheet at December 31, 2017.
3. What will Roberts Inc.’s income statement for the year ended December 31, 2017, report for the building?