Problem 8-3A (Algo) Asset cost allocation; straight-line depreciation LO C1 [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 oblem 8-3A (Algo) Part 1 quired: Allocate the costs incurred by Mitzu to the appropriate columns and total each column $ 340, 400 193,400 2,282,000 173,000
Problem 8-3A (Algo) Asset cost allocation; straight-line depreciation LO C1 [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 oblem 8-3A (Algo) Part 1 quired: Allocate the costs incurred by Mitzu to the appropriate columns and total each column $ 340, 400 193,400 2,282,000 173,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Tt1.
![Problem 8-3A (Algo) Asset cost allocation; straight-line depreciation LO C1, P1
[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 1
Required:
1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.
Allocation of Purchase Price
Land
Building 2
Land Improvements 1
Totals
Purchase Price
Demolition
Land grading
New building (Construction cost)
New improvements
Totals
Appraised
Value
$
$
Land
0
Percent of
Total
Appraised
Value
0 $
0%
Building 2
Total cost of
acquisition
0 $
Building 3
||
=
=
0
$
Apportioned Cost
Land
Improvements 1
0
$ 340, 400
193,400
2,282,000
173,00
0
Land
Improvements 2
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d0e6bf9-348c-40ab-ae4c-488cbc0bf710%2Fed41684c-86b7-4bfd-a55f-7a14dbe8380e%2Fhce4y0o_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 8-3A (Algo) Asset cost allocation; straight-line depreciation LO C1, P1
[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 1
Required:
1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.
Allocation of Purchase Price
Land
Building 2
Land Improvements 1
Totals
Purchase Price
Demolition
Land grading
New building (Construction cost)
New improvements
Totals
Appraised
Value
$
$
Land
0
Percent of
Total
Appraised
Value
0 $
0%
Building 2
Total cost of
acquisition
0 $
Building 3
||
=
=
0
$
Apportioned Cost
Land
Improvements 1
0
$ 340, 400
193,400
2,282,000
173,00
0
Land
Improvements 2
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education