CourseLover

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    Devry University
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    NatSteel Holdings Pte Ltd
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Category > Accounting Posted 07 Sep 2017 My Price 10.00

accounting help needed

20140620101544account_h.w.docx  question 

question.png step 1.png step 2.png  step 3.png  same to same example with some values changes 

In January 2013, Mitzu Co. pays $2,650,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $823,500, with a useful life of 20 years and an $75,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $305,000 that are expected to last another 10 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,921,500. The company also incurs the following additional costs:

 

 

 

 

  Cost to demolish Building 1

$

346,400  

  Cost of additional land grading

 

189,400  

  Cost to construct new building (Building 3), having a useful life
    of 25 years and a $402,000 salvage value

 

2,222,000  

  Cost of new land improvements (Land Improvements 2) near Building 2     having a 20-year useful life and no salvage value

 

173,000  

  Total costs

 

7,965,799  

 

  

Allocation   of purchase price

  

  

Appraised   value

  

  

Percent   of total appraized value

  

  

X

  

  

Total   cost of acquisition

  

  

=

  

  

Apportioned   cost

  

  

Land

  

  

  

  

  

  

x

  

  

  

  

=

  

  

  

  

Building   2

  

  

  

  

  

  

x

  

  

  

  

=

  

  

  

  

Land   improvements 1

  

  

  

  

  

  

x

  

  

  

  

=

  

  

  

  

Total

  

  

  

  

  

  

  

  

  

  

  

  

  

 

  

  

  

Land

  

  

Building   2

  

  

Building   3

  

  

Land   Improvements 1

  

  

Land   Improvements 2

  

  

Purchase   Price

  

  

  

  

  

  

  

  

  

  

  

  

Demolition

  

  

  

  

  

  

  

  

  

  

  

  

Land   grading

  

  

  

  

  

  

  

  

  

  

  

  

New   Building (Construction cost)

  

  

  

  

  

  

  

  

  

  

  

  

New   Improvements cost

  

  

  

  

  

  

  

  

  

  

  

  

Totals

  

  

  

  

  

  

  

  

  

  

  

 

 

2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2013.

Journal Entry Worksheet 

A.    Record the costs of the plant assets.

 

 

Journal Entry Worksheet

 

 

Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2013 when these assets were in use.

A.    Record the year-end adjusting entry for the depreciation expense of Building 2

B.    Record the year-end adjusting entry for the depreciation expense of Building 3

C.    Record the year-end adjusting entry for the depreciation expense of Land Improvements 1

D.   Record the year-end adjusting entry for the depreciation expense of Land Improvements 2.

https://www.studypool.com/uploads/questions/107239/20140620193653step_1.png

https://www.studypool.com/uploads/questions/107239/20140620193702step_2.png

https://www.studypool.com/uploads/questions/107239/20140620193709step_3.png

 

 

 

Answers

CourseLover
(12)
Status NEW Posted 07 Sep 2017 03:09 PM My Price 10.00

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