On January 1, Mitzu Company pays a lump-sum amount of $2,800,000 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 $366,000 and is expected to last another 12 years with no salvage value. The land is valued at $1,921,500. 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 oblem 8-3A (Algo) Part 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 $ 340,400 193,400 2,282,000 173,000
On January 1, Mitzu Company pays a lump-sum amount of $2,800,000 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 $366,000 and is expected to last another 12 years with no salvage value. The land is valued at $1,921,500. 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 oblem 8-3A (Algo) Part 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 $ 340,400 193,400 2,282,000 173,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![[The following information applies to the questions displayed below.]
On January 1, Mitzu Company pays a lump-sum amount of $2,800,000 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 $366,000 and is expected to
last another 12 years with no salvage value. The land is valued at $1,921,500. 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
Problem 8-3A (Algo) Part 2
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
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
$ 340,400
193,400
2,282,000
173,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c2c2f9b-c8de-48f6-b914-06d2bfc90071%2F1d78b2c7-b945-4c4d-bc9b-5198faba53e3%2Fn4pgeef_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
On January 1, Mitzu Company pays a lump-sum amount of $2,800,000 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 $366,000 and is expected to
last another 12 years with no salvage value. The land is valued at $1,921,500. 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
Problem 8-3A (Algo) Part 2
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
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
$ 340,400
193,400
2,282,000
173,000
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