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Required information Problem 8 - 3 A ( Algo ) Asset cost allocation; straight - line depreciation LO C 1 , P 1 [ The

Required information
Problem 8-3A (Algo) Asset cost allocation; straight-line depreciation LO C1, P1
[The following information applies to the questions displayed below.]
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 $579,500,
with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $579,500 and is expected to
last another 19 years with no salvage value. The land is valued at $1,891,000. The company also incurs the following
additional costs.
Cost to demolish Building 1
Cost of additional land grading
$342,400
Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value 189,400
Cost of new Land Improvements 2, having a 20-year useful life and no salvage value
173,000
oblem 8-3A (Algo) Part 2
Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.
Answer is not complete.
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