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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 $570,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $570,000 and is expected to last another 19 years with no salvage value. The land is valued at $1,860,000. 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 $ 342,400 185,400 2,262,000 178,000 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were n use.

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 $570,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $570,000 and is expected to last another 19 years with no salvage value. The land is valued at $1,860,000. 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 $ 342,400 185,400 2,262,000 178,000 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were n use.

FINANCIAL ACCOUNTING
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 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 $570,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $570,000 and is expected to last another 19 years with no salvage value. The land is valued at $1,860,000. 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 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use. View transaction list Journal entry worksheet 1 2 3 Date Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. 4 General Journal Debit $ 342,400 185,400 2,262,000 178,000 Credit
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 $570,000, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $570,000 and is expected to last another 19 years with no salvage value. The land is valued at $1,860,000. 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 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use. View transaction list Journal entry worksheet 1 2 3 Date Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. 4 General Journal Debit $ 342,400 185,400 2,262,000 178,000 Credit
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