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Chapter 10 Long-Term Assets In January 2015, Keona Co. pays $2,800,000 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 $641,300, with a useful life of 20 years and an $80,000 residual value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $408.100 that are expected to last another C1 14 years with no residual value. Without the buildings and improvements, the tract of land is valued at S1.865,600. The company also incurs the following additional costs: Pro Ass stra w $ 422,600 167,200 Cost to demolish Building Cost of additional land grading Cost to construct new building (Building 3), having a useful life of 25 years and a $390,100 residual value Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no residual value 2,019,000 B 158.000 Required 1. Prepare a table with the following column headings: Land. Building 2. Building 3. Land improve ments I, and Land Improvements 2. Allocate the costs incurred by Keona to the appropriate columns and total each column (round percents to the nearest 1%). 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2015 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2015 when these assets were in use

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