[The following Information applies to the questions displayed below.]On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 for land, Building 1, Building 2, and LandImprovements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $660,000,with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $600,000 and is expected tolast another 20 years with no salvage value. The land is valued at $1,740,000. The company also incurs the followingadditional costs.Cost to demolish Building 1Cost of additional land gradingCost to construct Building 3, having a useful life of 25 years and a $402,000 salvage valueCost of new Land Improvements 2, having a 20-year useful life and no salvage valueRequired:1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.Allocation of Purchase PriceLandBuilding 2Land Improvements 1TotalsPurchase PriceDemolitionLand gradingNew building (Construction cost)New improvementsTotalsView transaction listDateJanuary 01AppraisedValueRecord entrySNote: Enter debits before credits.$Journal entry worksheet< 1DateLandDecember 31Record entry0Record the cost of the plant assets, paid in cash.Percent ofTotalAppraisedValue0 $Note: Enter debits before credits.Building 2General JournalClear entry0%2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.00General JournalClear entry000Total cost ofacquisitionBuilding 3DebitSRecord the year-end adjusting entry for the depreciation expense of Building3.0 SCreditLandImprovements 1Apportioned CostView general journalDebit0 SLandImprovements 2CreditView general journal$ 343,400195,4002,302,000173,00000 Journal entry worksheet< 1 2Record the year-end adjusting entry for the depreciation expense of LandImprovements 1.Note: Enter debits before credits.DateDecember 31Record entryView transaction list3Journal entry worksheet< 1 23Note: Enter debits before credits.DateDecember 31Record entry43. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets werein use.4General JournalRecord the year-end adjusting entry for the depreciation expense of LandImprovements 2.Clear entryGeneral JournalClear entryDebitDebitCreditView general journalCreditView general journal>>

The lump sum price paid to acquire various assets can be apportioned on the basis of their fair…

[The following Information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 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 $660,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $600,000 and is expected to last another 20 years with no salvage value. The land is valued at $1,740,000. 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 uired: $ 343,400 195,400 2,302,000 173,000

[The following Information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 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 $660,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $600,000 and is expected to last another 20 years with no salvage value. The land is valued at $1,740,000. 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 uired: $ 343,400 195,400 2,302,000 173,000

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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