Final answer:
The depreciation expense for the third year is $12,500. The beginning net book value of the building for the third year is $175,000 and the ending net book value is $162,500. On the balance sheet, the building will be recorded at a net book value of $162,500.
Step-by-step explanation:
To address the student’s question, let’s break down each part:a. Record the depreciation expense for the third year.For the third year, the depreciation expense remains unchanged at $12,500 since the annual depreciation for the building has been specified as such.b. Beginning and ending net book value of the building for the third year.The beginning net book value of the building for the third year would be its original cost ($200,000) minus the accumulated depreciation at the end of the second year ($25,000), resulting in a beginning value of $175,000. After recording the depreciation for the third year, the accumulated depreciation will increase by $12,500 to
$37,500, making the ending net book value $162,500 ($200,000 - $37,500).c. Building on the balance sheet at the end of the third year.A. The depreciation expense for the third year would be $12,500.B. The beginning net book value of the building for the third year would be $200,000 - $25,000 = $175,000. The ending net book value of the building for the third year would be $175,000 - $12,500 = $162,500C. On the balance sheet at the end of the third year, the building would be recorded with a net book value of $162,500.he building will be presented on the balance sheet under assets at its net book value of $162,500, which is the cost of the building minus the total accumulated depreciation to date.