None 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 LandImprovements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $644,000,with a useful life of 20 years and a $60,000 salvage value. Land Improvements 1 is valued at $420,000 and is expected tolast another 12 years with no salvage value. The land is valued at $1,736,000. The company also incurs the followingadditional costs.Cost to demolish Building 1Cost of additional land grading$ 328,400175,400Cost to construct Building 3, having a useful life of 25 years and a $392,000 salvage valueCost of new Land Improvements 2, having a 20-year useful life and no salvage value2,202,000164,0002. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.View transaction listJournal entry worksheet1Record the cost of the plant assets, paid in cash.

Here, the value of assets purchased is more than the amount paid so we have to apportion the value…

Answered: 2. Prepare a single journal entry to…

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2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.

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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