Item6

Part 3 of 3

1.42points

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Item 6

Item 6 Part 3 of 3 1.42 points

Required information

[The following information applies to the questions displayed below.] On January 1, Mitzu Co. pays a lump-sum amount of $2,650,000 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 $660,000, with a useful life of 20 years and a $90,000 salvage value. Land Improvements 1 is valued at $420,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,920,000. The company also incurs the following additional costs.

Cost to demolish Building 1	$	345,400
Cost of additional land grading		189,400
Cost to construct Building 3, having a useful life of 25 years and a $402,000 salvage value		2,202,000
Cost of new Land Improvements 2 having a 20-year useful life and no salvage value		178,000

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 list Journal entry worksheet 2 3 4 Record the year-end adjusting entry for the depreciation expense of Building Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal