Chapter 11, Problem 2EB

Johnson, Incorporated had the following transactions during the year:

• Purchased a building for $5,000,000 using a mortgage for financing

• Paid $2,000 for ordinary repair on a piece of equipment

• Sold product on account to customers for $1,500,600

• Purchased a copyright for $5,000 cash

• Paid $20,000 cash to add a storage shed in the corner of an existing building

• Paid $360,000 in monthly salaries

• Paid $25,000 for routine maintenance on equipment

• Paid $110,000 for major repairs

If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?