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Desperate and need help with the ones I got wrong. Please and thank you! In January 2017, Mitzu Co. pays $2,700,000 for a tract of
Desperate and need help with the ones I got wrong. Please and thank you!
In January 2017, Mitzu Co. pays $2,700,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $660,000, with a useful life of 20 years and a $90,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $570,000 that are expected to last another 19 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,770,000. The company also incurs the following additional costs: Part 1 of 3 Cost to demolish Building 1 Cost of additional land grading Cost to construct new building (Building 3),having a useful life of 25 $ 343,400 195,400 2,202,000 178,000 years and a $400,000 salvage value 1.76/2.22 points awarded Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value Scored Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of purchase Appraised Total Total cost of Appraisedacquisition Cost Value 1,770,000 660,000 570,000 3,000,000 59% 22% 19% 100% 2,700,000 2,700,000 2,700,000 159,300 594,000 51,300 x Building 2 Land Totals 804,600 Land Building 2 Building 3 59,300 S 594,000 343,400 95,400 Purchase Price 51,300 Land grading building 2,202,000 cost 178,000 178,000 Totals 698,100 594,000 2,202,000 51,300Step by Step Solution
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