Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need help with question Required information [The folio wing fnfonnalion applies to the questions displayed below} On January 1, Mitzu Co. pays a lump-sum amount

image text in transcribed

Need help with question

image text in transcribedimage text in transcribed
Required information [The folio wing fnfonnalion applies to the questions displayed below} On January 1, Mitzu Co. pays a lump-sum amount of $2,550,000 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 $310,000, with a useful life of 20 years and a $85,000 salvage value. Land |mprovements1 is valued at $390,000 and is expected to last another 13 years with no salvage value' The land is valued at $1,800,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 341,400 Cost of additional land grading 185,400 Cost to construct Building 3. having a useful life of 25 years and a $400,000 salvage value 2,262,000 Cost of new Land Improvements 2 having a 20year useful life and no salvage value 168,000 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Percent of Allocation of purchase price Appraised Total Total cost of Value Appraised X acquisition = Apportioned Cost Value Land X Building 2 X Land Improvements 1 X Totals Land Building 2 Building 3 Land Land Improvements 1 Improvements 2 Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental accounting principle

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

21st edition

1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587

Students also viewed these Accounting questions