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Requirea information [The following information applies to the questions displayed below.) On January 1, Mitzu Co. pays a lum
3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these
3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first ye in use.
Journal entry worksheet < 1 2 3 Record the year-end adjusting entry for the depreciation expense of Land Improvements 1. Note
3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the firs in use. View
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Answer #1
Allocate the lump-sum amount paid to Building 2, Land Improvement 1, and Land as follows:
Appraised Value Percent of Total Appraised Value Lump-sum amount paid Allocated cost
Land 1711000 58% 2800000 1624000
Building 2 737500 25% 2800000 700000
Land Improvements 1 501500 17% 2800000 476000
Total 2950000 100% 2800000
Determine the amount to be recorded as the cost of each asset as follows:
Land Building 2 Building 3 Land Improvements 1 Land Improvements 2
Allocated cost 1624000 700000 476000
Cost to demolish Building 1 342400
Land grading cost 187400
Cost to construct Building 3 2202000
Cost of Land Improvements 2 168000
Total cost to be recorded85 2153800 700000 2202000 476000 168000
Prepare the required journal entries as follows:
1. Record the year-end adjusting entry for depreciation expense of Building 2.
Date General Journal Debit Credit
Dec. 31 Depreciation expense (700000-85000)/20 30750
      Accumulated Depreciation - Building 2 30750
2. Record the year-end adjusting entry for depreciation expense of Building 3.
Date General Journal Debit Credit
Dec. 31 Depreciation expense (2202000-402000)/25 72000
      Accumulated Depreciation - Building 3 72000
3. Record the year-end adjusting entry for depreciation expense of Land Improvements 1.
Date General Journal Debit Credit
Dec. 31 Depreciation expense (476000/17) 28000
      Accumulated Depreciation - Land Improvements 1 28000
4. Record the year-end adjusting entry for depreciation expense of Land Improvements 2.
Date General Journal Debit Credit
Dec. 31 Depreciation expense (168000/20) 8400
      Accumulated Depreciation - Land Improvements 2 8400
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