On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 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 $762,500, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $335,500 and is expected to last another 11 years with no salvage value. The land is valued at $1,952,000. 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 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1. $ 338,400 187,400 2,242,000 173,000
On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 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 $762,500, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $335,500 and is expected to last another 11 years with no salvage value. The land is valued at $1,952,000. 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 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1. $ 338,400 187,400 2,242,000 173,000
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 $2,750,000 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 $762,500,
with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $335,500 and is expected to
last another 11 years with no salvage value. The land is valued at $1,952,000. 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
$ 338,400
187,400
2,242,000
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.
Date
January 01
General Journal
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d3d8deb-8b5d-4bc6-b1e1-562032e8da26%2F5af5d1af-8c31-4cb8-a31a-d050682e7d34%2Ffgvgpus_processed.png&w=3840&q=75)
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Required information
[The following information applies to the questions displayed below.]
On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 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 $762,500,
with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $335,500 and is expected to
last another 11 years with no salvage value. The land is valued at $1,952,000. 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
$ 338,400
187,400
2,242,000
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.
Date
January 01
General Journal
Debit
Credit
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