(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 $796,500, with a useful life of 20 years and a $90,000 salvage value. Land Improvements 1 is valued at $324,500 and is expected to last another 11 years with no salvage value. The land is valued at $1,829,000. 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 $ 339,400 187,400 2,282,000 168,000
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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[The following information applies to the questions displayed below.]
On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 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 $796,500,
with a useful life of 20 years and a $90,000 salvage value. Land Improvements 1 is valued at $324,50
last another 11 years with no salvage value. The land is valued at $1,829,000. The company also incurs the following
additional costs.
and is expected to
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 ife and no salvage value
$ 339, 400
187,400
2, 282, 000
168, 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
General Journal
Debit
Credit
January 01 Land
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The journal keeps the record of day to day transactions of the business.
The lump - sum paid for multiple assets, can be proportioned to different assets on the basis of market value or appraised value.
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