Required Information (The following Information applies to the questions displayed below.) On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Bullding 1. Bullding 2. and Land Improvements 1. Bullding 1 has no value and will be demolished. Bulding 2 will be an office and is appralsed at $780,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 Is valued at $420,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,800,000. The company also Incurs the following additional costs. $ 343,400 191,400 Cost to denolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $402,000 salvage value Cost of new Land Improvenents 2 having a 20-year useful life and no salvage value 2,222,000 178,000 2 Prepare a single Journal entry to record all the Incurred costs assuming they are paid in cash on January 1. Viow transaction Hat Journal entry worksheet Record the cost of the plant assets, paid in cash. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01 Record entry Clear entry Vlew goneral journal

Required Information (The following Information applies to the questions displayed below.) On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Bullding 1. Bullding 2. and Land Improvements 1. Bullding 1 has no value and will be demolished. Bulding 2 will be an office and is appralsed at $780,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 Is valued at $420,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,800,000. The company also Incurs the following additional costs. $ 343,400 191,400 Cost to denolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $402,000 salvage value Cost of new Land Improvenents 2 having a 20-year useful life and no salvage value 2,222,000 178,000 2 Prepare a single Journal entry to record all the Incurred costs assuming they are paid in cash on January 1. Viow transaction Hat Journal entry worksheet Record the cost of the plant assets, paid in cash. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01 Record entry Clear entry Vlew goneral journal

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Description: Required Information[The following information applies to the questions dlisplayed below.]On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Bulding 1. Bullding 2. andLand Improvements 1. Building 1 has no value and will be demol

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 7Q

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
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Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $2,100,000 for the land. Tree Lovers will sell the lumber as it is harvested and expects to deplete it over five years (twenty acres in year one, thirty acres in year two, twenty-five acres in year three, fifteen acres in year four, and ten acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
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Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
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