In January 2011, 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 $840,000, with a useful life of 20 years and an $85,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $270,000 that are expected to last another 9 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,890,000. The company also incurs the following additional costs:
| Cost to demolish Building 1 | $ | 347,400 |
| Cost of additional land grading | 193,400 | |
| Cost to construct new building (Building 3), having a useful life of 25 years and a $400,000 salvage value |
2,222,000 | |
| Cost of new land improvements (Land Improvements 2) near Building 2 having a 20 year useful life and no salvage value |
173,000 |
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Allocate the costs incurred by Keona to the appropriate columns and total each column. (Leave no cells blank be certain to enter “0” wherever required. Omit the “$” sign in your response.) |
| Land | Building 2 | Building 3 | Land improvements 1 |
Land improvements 2 |
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| Purchase price | $ | $ | $ | $ | $ | ||||
| Demolition | |||||||||
| Land grading | |||||||||
| New building | |||||||||
| New improvements | |||||||||
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| Totals | $ | $ | $ | $ | $ | ||||
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Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2011. (Omit the “$” sign in your response.)
| Date | General Journal | Debit | Credit |
| Jan. 1 | |||
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check my workeBook Links (2)references
Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2011. (Omit the “$” sign in your response.)
| Date | General Journal | Debit | Credit |
| Jan. 1 | |||
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check my workeBook Links (2)references