[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 $793,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $427,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,830,000. 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 $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 Appraised Value $ $ 1,830,000 793,000 427,000 3,050,000 Land Percent of Total Appraised Value x 0% x 0% X 0% X 0% Building 2 Total cost of acquisition $ 2,600,000 2,600,000 2,600,000 Building 3 ca = = $ Apportioned Cost Land Improvements 1 Land Improvements 2 0 $ 340,400 189,400 2,302,000 168,000
[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 $793,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $427,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,830,000. 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 $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 Appraised Value $ $ 1,830,000 793,000 427,000 3,050,000 Land Percent of Total Appraised Value x 0% x 0% X 0% X 0% Building 2 Total cost of acquisition $ 2,600,000 2,600,000 2,600,000 Building 3 ca = = $ Apportioned Cost Land Improvements 1 Land Improvements 2 0 $ 340,400 189,400 2,302,000 168,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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Question
![[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 $793,000,
with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $427,000 and is expected to
last another 14 years with no salvage value. The land is valued at $1,830,000. 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 $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
Appraised
Value
$
$
1,830,000
793,000
427,000
3,050,000
Land
Percent of
Total
Appraised
Value
0% X
0% X
0%
0%
Building 2
x
< Prev
Total cost of
acquisition
$ 2,600,000
2,600,000
2,600,000
Building 3
6 7
8
=
=
=
$
of 11
Land
Improvements 1
Apportioned Cost
‒‒‒
Land
Improvements 2
Next >
0
$ 340,400
189,400
2,302,000
168,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F45ecc33f-dfe9-42b4-b789-0ac6bcbaaba1%2Fee98dea3-6868-4c1a-8140-82d7b63b4100%2Fccrydpn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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 $793,000,
with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $427,000 and is expected to
last another 14 years with no salvage value. The land is valued at $1,830,000. 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 $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
Appraised
Value
$
$
1,830,000
793,000
427,000
3,050,000
Land
Percent of
Total
Appraised
Value
0% X
0% X
0%
0%
Building 2
x
< Prev
Total cost of
acquisition
$ 2,600,000
2,600,000
2,600,000
Building 3
6 7
8
=
=
=
$
of 11
Land
Improvements 1
Apportioned Cost
‒‒‒
Land
Improvements 2
Next >
0
$ 340,400
189,400
2,302,000
168,000
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