On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for lånd, 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 $796,500, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $295,000 and is expected to last another 10 years with no salvage value. The land is valued at $1,858,500. 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 $398,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value repare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1. $ 340,400 193,400 2,282,000 173,000
On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for lånd, 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 $796,500, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $295,000 and is expected to last another 10 years with no salvage value. The land is valued at $1,858,500. 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 $398,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value repare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1. $ 340,400 193,400 2,282,000 173,000
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 15PB: Urquhart Global purchases a building to house its administrative offices for $500,000. The best...
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