Question
In January 2016, Mitzu Co. pays $2,600,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build
In January 2016, Mitzu Co. pays $2,600,000 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 $810,000, 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 $300,000 that are expected to last another 10 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,890,000. The company also incurs the following additional costs:
343,400 Cost to demolish Building 1 Cost of additional land grading Cost to construct new bullding (Building 3), having a useful lfe of 25 years and a $400,000 189,400 2,222.000 173,000 salvage value Cost of new land Improvements (Land Improvements 2) near Building 2. having a 20-year useful lfe and no salvage valueStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started