Question

Please answer the whole question.

and how did you figure out the percentages.

Required information

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In January 2017, 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 $701,500, with a useful life of 20 years and a $80,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $488,000 that are expected to last another 16 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,860,500. The company also incurs the following additional costs:

Cost to demolish Building 1	$	339,400
Cost of additional land grading		191,400
Cost to construct new building (Building 3), having a useful life of 25 years and a $400,000 salvage value		2,262,000
Cost of new land improvements (Land Improvements 2) near Building 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.

Percent Total Allocation of purchase price Appraised Value AppraisedTotal cost of acquisition | = Apportioned Cost Value Land Building 2 Land Improvements 1 Totals $ 1,860,500 701,500 488,000 S 3,050,000 0% Land Building2 Building3 Improvements 1 Im Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals

2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2017.

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2017 when these assets were in use.

Answer 1