Required Information [The following Information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 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 $619,500, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $590,000 and is expected to last another 20 years with no salvage value. The land is valued at $1,740,500. 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 $400,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value $ 347,400 191,400 2,262,000 168,000 Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were se. View transaction list Journal entry worksheet < 1 2 3 4 Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. Date December 31 General Journal Debit Credit
Required Information [The following Information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 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 $619,500, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $590,000 and is expected to last another 20 years with no salvage value. The land is valued at $1,740,500. 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 $400,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value $ 347,400 191,400 2,262,000 168,000 Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were se. View transaction list Journal entry worksheet < 1 2 3 4 Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. Date December 31 General Journal Debit Credit
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.8AMCP
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