ation Problem 8-3A (Algo) Asset cost allocation; straight-line depreciation LO C1, P1 [The following information applies to the questions displayed below.) On January 1, Mitzu Co. pays a lump-sum amount of $2,500,000 for land, Building 1. Building 2, and Land improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $823,500, with a useful life of 20 years and a $90,000 salvage value. Land improvements 1 is valued at $305,000 and is expected to last another 10 years with no salvage value. The land is valued at $1,921,500. The company also incurs the following additional costs. Cost to demolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $398, 200 salvage value Cost of new Land Improvements 2 having a 20-year useful life and no salvage value $ 345,480 187,400 2,282,200 173,800 Problem 8-3A (Algo) Part 3 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use View transaction fist Journal entry worksheet 1 2 3 4 Problem 8-3A (Algo) Part 3 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets in use View transaction list Journal entry worksheet 2 3 4 > Record the year-end adjusting entry for the depreciation expense of Building 2 Note: Enter debits before credits Date Dec 31 Dobit Credit General Journal Depreciation expense Building 2 Accumulated depreciation --Building 2 Record entry Clear entry View general journal 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1. Ng Dato Jan 01 Credit 1 Answer is complete and correct. General Journal Land Building 2 Building 3 Land improvements 1 Land improvements 2 Cash Debit 2,170,800 702,000 - 2,282,000 260,000 173,000 5,587,800 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Answer is complete and correct. Allocation of Purchase Price Appraised Value Total cost of acquisition Apportioned Cost Land Building 2 Land Improvements 1 Totals $ Percent of Total Appraised Value 63% 27% 10% 100% $ 1,921,500 823,500 305,000 $ 3,050,000 X 2,600,000 2,600,000 2,600,000 1,638,000 702,000 260,000 2,600,000 X Land Building 2 Building 3 Land Improvements Land Improvements $ 702,000 260,000 $ 1,638,000 345,400 187,400 Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals 2,282,000 $ 2,170,800 $ 702,000 $ 2,282,000 173,000 173,000 260.000