On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 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 $810,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $450,000 and is expected to last another 15 years with no salvage value. The land is valued at $1,740,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value $ 339, 400 187,400 2,282,000 173,000 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price Appraised Value Percent of Total Appraised Value X Total cost of acquisition Apportioned Cost Land $ 1,740,000 X $ $ 2,750,000 2,750,000 1,595,000 742,500 810,000 X Building 2 Land Improvements 1 Totals 58% 27% 15% 100% X 2,750,000 = 450,000 3,000,000 412,500 2,750,000 $ $ Land Building 2 Building 3 Land Improvements 1 Land Improvements 2 Purchase Price 339,400 187,400 Demolition Land grading New building (Construction cost) New improvements Totals 0 0 526,800 $ 0 $ 0 $ 0 $ 0 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1. View transaction list Journal entry worksheet 1 Record the cost of the plant assets, paid in cash. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry Clear entry View general journal 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 View journal entry worksheet No Date General Journal Debit Credit 1 December 31 Depreciation expenseBuilding 2 Accumulated depreciationBuilding 2 2 December 31 Depreciation expenseBuilding 3 Accumulated depreciationBuilding 3 3 December 31 Depreciation expenseLand improvements 1 Accumulated depreciationLand improvements 1 4 December 31 Depreciation expense-Land improvements 2 Accumulated depreciation-Land improvements 2