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Required information The following information applies to the questions displayed below] In January 2017, Mitzu Co. pays $2,600,000 for a tract of land with two
Required information The following information applies to the questions displayed below] In January 2017, Mitzu Co. pays $2,600,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office: it is appraised at $644,000, with a useful life of 20 years and a $60,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $420,000 that are expected to last another 12 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,736.000. The company also incurs the following additional costs: Cost to demolish Building 1 Cost of additional land grading Cost to construct new building (Building 3), having a useful life of 25 $328,400 175,400 2,202,000 164,000 years and a $392,000 salvage value Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value
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