Solution
Mitzu Co
Allocation and purchase price |
Appraised Value |
% |
total cost of acquisition |
Apportioned Cost |
Land |
$1,736,000 |
62% |
$2,600,000 |
$1,612,000 |
Building 2 |
$644,000 |
23% |
$2,600,000 |
$598,000 |
Land Improvements1 |
$420,000 |
15% |
$2,600,000 |
$390,000 |
Total |
$2,800,000 |
100% |
$2,600,000 |
$2,600,000 |
Land |
Building 2 |
Building 3 |
Land Improvements 1 |
Land Improvements 2 |
||
Purchase price |
$1,612,000 |
$598,000 |
0 |
$390,000 |
0 |
|
Demolition |
$328,400 |
0 |
0 |
0 |
0 |
|
Land grading |
$175,400 |
0 |
0 |
0 |
||
Building 3 (Construction cost)0 |
$2,202,000 |
0 |
0 |
|||
New Improvements Cost0 |
0 |
0 |
$164,000 |
|||
Totals |
$2,115,800 |
$598,000 |
$2,202,000 |
$390,000 |
$164,000 |
Entry to record cost of the plant assets, paid in cash:
Date |
Account Titles and Explanation |
Ref. No. |
Debit |
Credit |
1-Jan |
Land |
$2,115,800 |
||
Building 2 |
$598,000 |
|||
Building 3 |
$2,202,000 |
|||
Land Improvements 1 |
$390,000 |
|||
Land Improvements 2 |
$164,000 |
|||
Cash |
$5,469,800 |
|||
(To record cost of plant assets paid in cash) |
Computations:
Year-end adjusting entry for depreciation expense of Building 2:
Date |
Account Titles and Explanation |
Ref. No. |
Debit |
Credit |
|
31-Dec |
Depreciation Expense - Building 2 |
$26,900 |
|||
Accumulated Depreciation - Building 2 |
$26,900 |
||||
(To record depreciation expense on Building 2, (598,000 - 60,000)/20 = $26,900) |
Year-end adjusting entry for depreciation expense of Building 3:
Date |
Account Titles and Explanation |
Ref. No. |
Debit |
Credit |
|
31-Dec |
Depreciation Expense - Building 3 |
$73,400 |
|||
Accumulated Depreciation - Building 3 |
$72,400 |
||||
(To record depreciation expense on Building 3, (2,202,000 - 392,000)/25 = $72,400) |
Year-end adjusting entry for depreciation expense of Land Improvements 1:
Date |
Account Titles and Explanation |
Ref. No. |
Debit |
Credit |
|
31-Dec |
Depreciation Expense – Land Improvements 1 |
$32,500 |
|||
Accumulated Depreciation – Land Improvements 1 |
$32,500 |
||||
(To record depreciation expense on Land Improvement 1, (390,000)/12 = $32,500) |
Year-end adjusting entry for depreciation expense of Land Improvement 2:
Date |
Account Titles and Explanation |
Ref. No. |
Debit |
Credit |
|
31-Dec |
Depreciation Expense – Land Improvement 2 |
$8,200 |
|||
Accumulated Depreciation – Land Improvement 2 |
$8,200 |
||||
(To record depreciation expense on Land Improvement 2, (164,000)/20 = $8,200) |
Having trouble to this, please show work Part 1 Part 2 Part 3 Required information The...
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