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 $767,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $383,500 and is expected to last another 13 years with no salvage value. The land is valued at $1,799,500. 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 $ 346,400 193,400 2,282,000 173,000 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 1 Record the cost of the plant assets, paid in cash. Note: Enter debits before credits. General Journal Debit Credit Date January 01 Land Building 2 Building 3 Land improvements 1 Land improvements 2 Frach 228,200 >

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 $767,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $383,500 and is expected to last another 13 years with no salvage value. The land is valued at $1,799,500. 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 $ 346,400 193,400 2,282,000 173,000 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 1 Record the cost of the plant assets, paid in cash. Note: Enter debits before credits. General Journal Debit Credit Date January 01 Land Building 2 Building 3 Land improvements 1 Land improvements 2 Frach 228,200 >

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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