Homework Help is Here – Start Your Trial Now!
Business
Accounting
1, Mitzu Company pays a lump-sum amount of $2,600,000 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 $720,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $540,000 and is expected to last another 18 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 Problem 10-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price Land Building 2 Land Improvements 1 Totals Purchase Price Demolition Land grading New building (Construction cost) $ $ Appraised Value $ 1,740,000 720,000 540,000 3,000,000 Land 1,508,000 342,400 189,400 Percent of Total Appraised Value 58% X 24% X 18% X 100% Building 2 < Prev Total cost of acquisition $ 2,600,000 2,600,000 2,600,000 Building 3 4 5 6 = = = of 11 $ $ Apportioned Cost Land Improvements 1 www www HH Next > $ 342,400 189,400 2,202,000 168,000 1,508,000 624,000 468,000 2,600,000 Land Improvements 2

1, Mitzu Company pays a lump-sum amount of $2,600,000 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 $720,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $540,000 and is expected to last another 18 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 Problem 10-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price Land Building 2 Land Improvements 1 Totals Purchase Price Demolition Land grading New building (Construction cost) $ $ Appraised Value $ 1,740,000 720,000 540,000 3,000,000 Land 1,508,000 342,400 189,400 Percent of Total Appraised Value 58% X 24% X 18% X 100% Building 2 < Prev Total cost of acquisition $ 2,600,000 2,600,000 2,600,000 Building 3 4 5 6 = = = of 11 $ $ Apportioned Cost Land Improvements 1 www www HH Next > $ 342,400 189,400 2,202,000 168,000 1,508,000 624,000 468,000 2,600,000 Land Improvements 2

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 15PB: Urquhart Global purchases a building to house its administrative offices for $500,000. The best...
See similar textbooks
icon
Related questions
Question

A13

On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 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 $720,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $540,000 and is expected to last another 18 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 Problem 10-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price Land Building 2 Land Improvements 1 Totals Purchase Price Demolition Land grading New building (Construction cost) $ $ $ Appraised Value 1,740,000 720,000 540,000 3,000,000 Land 1,508,000 342,400 189,400 Percent of Total Appraised Value 58% X 24% X 18% X 100% Building 2 X < Prev Total cost of acquisition $ 2,600,000 2,600,000 2,600,000 4 Building 3 S5 6 = = II = = of 11 $ $ Apportioned Cost Land Improvements 1 Next > $ 342,400 189,400 2,202,000 168,000 1,508,000 624,000 468,000 2,600,000 Land Improvements 2
Transcribed Image Text:On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 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 $720,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $540,000 and is expected to last another 18 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 Problem 10-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price Land Building 2 Land Improvements 1 Totals Purchase Price Demolition Land grading New building (Construction cost) $ $ $ Appraised Value 1,740,000 720,000 540,000 3,000,000 Land 1,508,000 342,400 189,400 Percent of Total Appraised Value 58% X 24% X 18% X 100% Building 2 X < Prev Total cost of acquisition $ 2,600,000 2,600,000 2,600,000 4 Building 3 S5 6 = = II = = of 11 $ $ Apportioned Cost Land Improvements 1 Next > $ 342,400 189,400 2,202,000 168,000 1,508,000 624,000 468,000 2,600,000 Land Improvements 2
Expert Solution
steps

Step by step

Solved in 3 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Property, Plant and Equipment
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SEE MORE TEXTBOOKS