On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Bullding 1. Bullding 2. and Land Improvements 1. Bulding 1 has no value and will be demolished. Bullding 2 will be an office and is appralsed at $780,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 Is valued at $420,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,800,000. The company also Incurs the following additional costs. $ 343,400 191,400 Cost to denolish 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 Improvenents 2 having a 20-year useful 1ife and no salvage value 2,222,000 178,000 Required: 1. Allocate the costs Incurred by Mitzu to the appropriate columns and total each column.

On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Bullding 1. Bullding 2. and Land Improvements 1. Bulding 1 has no value and will be demolished. Bullding 2 will be an office and is appralsed at $780,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 Is valued at $420,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,800,000. The company also Incurs the following additional costs. $ 343,400 191,400 Cost to denolish 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 Improvenents 2 having a 20-year useful 1ife and no salvage value 2,222,000 178,000 Required: 1. Allocate the costs Incurred by Mitzu to the appropriate columns and total each column.

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Description: Required Information[The following information applies to the questions dlisplayed below.]On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Bulding 1. Bullding 2. andLand Improvements 1. Building 1 has no value and will be demol

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $644,000, with a useful life of 20 years and a $60,000 salvage value. Land Improvements 1 is valued at $420,000 and is expected to last another 12 years with no salvage value. The land is valued at $1,736,000. The company also incurs the following additional costs. Cost to demolish Building 1 . $ 328,400 Cost of additional land grading. $175,400 Cost to construct Building 3, having a useful life Cost of new Land Improvements 2, having a 20-year of 25 years and a $392,000 salvage value 2,202,000 useful life and no salvage value. 164,000 Required 1. Prepare a table with the following column headings: Land, Building 2, Building 3, Land Improvements 1, and Land Improvements 2. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. 2. Prepare a…
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