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 $660,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $570,000 and is expected to last another 19 years with no salvage value. The land is valued at $1,770,000. 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 Cost of new Land Improvements 2 having a 20-year useful life and no salvage value 346,400 187,400 $398,000 salvage value 2,282,000 173,000 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Percent of Appraised Value Total cost of Total Allocation of purchase price Apportioned Cost X Appraised Value acquisition Land = X Building 2 X = Land Improvements 1 X Totals Land Land Building 2 Land Building 3 Improvements 1 Improvements 2 Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals 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. General Journal Date Debit Credit Jan 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 Journal entry worksheet 2 3 1 4 > Record the year-end adjusting entry for the depreciation expense of Building 2 Note: Enter debits before credits. General Journal Date Debit Credit Dec 31 Record entry Clear entry View general journal