! Required information [The following information applies to the questions displayed below.] On January 1, Mitzu Co. pays a lump-sum amount of $2,700,000 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 $678,500, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $531,000 and is expected to last another 18 years with no salvage value. The land is valued at $1,740,500. The company also incurs the following additional costs. $ 338, 400 195,400 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 2,222,000 173,000 Required: 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 Total cost of acquisition Apportioned Cost Land X = X = Building 2 Land Improvements 1 Totals X Land Building 2 Building 3 Land Improvements 1 Land Improvements 2 Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals ! Required information (The following information applies to the questions displayed below.] On January 1, Mitzu Co. pays a lump-sum amount of $2,700,000 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 $678,500, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $531,000 and is expected to last another 18 years with no salvage value. The land is valued at $1,740,500. The company also incurs the following additional costs. $ 338,400 195,400 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 2,222,000 173,000 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 Record the cost of the plant assets, paid in cash. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01 Record entry Clear entry View general journal ! Required information [The following information applies to the questions displayed below.) On January 1, Mitzu Co. pays a lump-sum amount of $2,700,000 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 $678,500, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $531,000 and is expected to last another 18 years with no salvage value. The land is valued at $1,740,500. The company also incurs the following additional costs. $ 338,400 195,400 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 2,222,000 173,000 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use. Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of Land Improvements 2. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal
