Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1 , Mitzu Company pays a lump - sum amount of $ 2 , 6 5 0 , 0 0 0 for land,

On January 1, Mitzu Company 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 $649,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $472,000 and is expected to last another 16 years with no salvage value. The land is valued at $1,829,000. The company also incurs the following additional costs.
Cost to demolish Building 1 $ 341,400
Cost of additional land grading 195,400
Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value 2,302,000
Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 173,000!
Required information
[The following information applles to the questions displayed below.]
On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 for land, Bullding 1, Bullding 2, and Land
Improvements 1. Bullding 1 has no value and will be demolished. Bullding 2 will be an office and Is appralsed at $649,000,
With a useful Iffe of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $472,000 and is expected to
last another 16 years with no salvage value. The land is valued at $1,829,000. The company also Incurs the following
additional costs.
Cost to denolish Building 1
Cost of additional land grading
Cost to construct Building 3, having a useful 1 ife of 25 years and a $400,000 salvage value
cost of new Land Improvenents 2, having a 20-year useful life and no salvage value
$341,490
195,490
2,302,090
173,000
Required:
Allocate the costs Incurred by Mitzu to the approprlate columns and total each column.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Financial Accounting International Financial Reporting Standards Global Edition

Authors: Charles T. Horngren, C. William Thomas, Wendy M. Tietz, Themin Suwardy, Walter T. Harrison

11th Edition

9781292211145

More Books

Students also viewed these Accounting questions