On January 1, Mitzu Co. 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 $80,000 salvage value. Land Improvements 1 is valued at $390,000 and is expected to last another 13 years with no salvage value. The land is valued at $1,890,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cont of additional land grading Cost to construct Building 3, having a useful 1ite of 25 yearn and a $402,000 salvage value Cont of new Land Improvements 2 having a 20-year useful 1ife and no nalvage value $ 344,400 189, 400 2,202,000 173,000 Problem 8-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Percent of Total Total cost of auuisition Appraised Allocation of Purchase Price Apportioned Cost Malua
On January 1, Mitzu Co. 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 $80,000 salvage value. Land Improvements 1 is valued at $390,000 and is expected to last another 13 years with no salvage value. The land is valued at $1,890,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cont of additional land grading Cost to construct Building 3, having a useful 1ite of 25 yearn and a $402,000 salvage value Cont of new Land Improvements 2 having a 20-year useful 1ife and no nalvage value $ 344,400 189, 400 2,202,000 173,000 Problem 8-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Percent of Total Total cost of auuisition Appraised Allocation of Purchase Price Apportioned Cost Malua
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, Mitzu Co. 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 $80,000 salvage value. Land Improvements 1 is valued at $390,000 and is expected to last another 13
years with no salvage value. The land is valued at $1,890,000. 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 $402,000 salvage value
Cost of new Land Improvements 2
having a 20-year useful life and no salvage value
$ 344, 400
189, 400
2,282,000
173,000
Problem 8-3A (Algo) Part 1
Required:
1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.
Percent of
Total
Appraised
Total cost of
Allocation of Purchase Price
Apportioned Cost
Value
Annraised
acouisition
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Required information
1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column,
Percent of
Total
Appraised
Value
- Total cest of
acquisition
Allocation of Purchase Price
Apportioned Cost
Appraised
Value
Land
Building 2
1,890.000
720,000
300,000
3,000,000
$ 200,000
2600,000
Land Improvements 1
Totals
2.000,000
24
Land
Building 2
Building 3
Land
Land
Improvements 1 Improvements 2
Purchase Price
Demolition
Land grading
New bulding (Construction cost)
Now improvements
Totals
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