On January 1, Mitzu Company pays a lump-sum amount of $2,700,000 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 $854,000, with a useful life of 20 years and a $90,000 salvage value. Land Improvements 1 is valued at $396,500 and is expected to last another 13 years with no salvage value. The land is valued at $1,799,500. The company also incurs the following additional costs.

Cost to demolish Building 1 $342,400

Cost of additional land grading 189,400

Cost to construct Building 3,

having a useful life of 25 years and a $400,000 salvage value 2,282,000

Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 173,000

Required:

1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.

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

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use.

Required information [The following information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,700,000 for land, Building 1, Building 2, and Land Improvements 1. Bulling 1 has no value and will be demolished. Bullding 2 will be an office and is appraised at $854,000, with a useful life of 20 years and a $90,000 salvage value. Land improvements 1 is valued at $396,500 and is expected to last another 13 years with no salvage value. The land is valued at $1,799,500. The company also incurs the following additional costs. Cost to denolish Buflding 1 cost of additional land grading cost to construct Building 3 , hoving a usefut tife of 25 years and a $400,000 satvage vatue cost of new Land Inprovements 2, having a 20 -year useful life and no satvage value 342,400 189,400 2,282,000 173,000 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1 . Journal entry worksheet Record the cost of the plant assets, paid in cash. Motel tnter debits before credits. 3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use. Journal entry worksheet 2 4 Record the year-end adjusting entry for the depreciation expense of Building 2. Note: Enter debits before credits. Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of Building 3. Note: Enter debits before credits. Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of Land Improvements 1. Note: Enter debits before credits. Journal entry worksheet Record the year-end adjusting entry for the depreciation expense of Land Improvements 2. Note: Enter debits before credits