In January 2015, Mitzu Co. pays $2,750,000 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 $796,500, with a useful life of 20 years and a $75,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $295,000 that are expected to last another 10 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,858,500. The company also incurs the following additional costs:

[The following information applies to the questions displayed below.] In January 2015, Mitzu Co. pays $2,750,000 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 $796,500, with a useful life of 20 years and a $75,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $295,000 that are expected to last another 10 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,858,500. The company also incurs the following additional costs: $ 347,400 189.400 Cost to demolish Building 1 Cost of additional land grading Cost to construct new building (Building 3), having a useful life of 25 years and a $402,000 salvage value Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value 2.222.000 178,000 2. value 10.00 points Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. (Round your percentage answers to the nearest whole number.) Allocation of purchase price Appraised Value Percent of Total Appraised Value x Total cost of acquisition Apportioned Cost X Land Building 2 Land Improvements 1 Totals X Land Building 2 Building 3 Land Improvements 1 Land Improvements 2 Purchase Price Demolition Land grading New building (Construction cost) New improvements cost Totals 3. value 10.00 points 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2015. View transaction list Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal References eBook & Resources