Select Page

## in january 2011 keona co pays 2 800 000 for a tract of land with two buildings on it 560919

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 \$641,300, with a useful life of 20 years and an \$80,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at \$408,100 that are expected to last another 14 years with no salvage value. Without the buildings and improvements, the tract of land is valued at \$1,865,600. The company also incurs the following additional costs:

Cost to demolish Building 1 \$ 422,600

Cost to construct new building (Building 3), having a useful life

of 25 years and a \$390,100 salvage value 2,019,000

Cost of new land improvements (Land Improvements 2) near Building 2

having a 20 year useful life and no salvage value 158,000

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 Landimprovements 1 Landimprovements 2

Purchase price \$ \$ \$ \$ \$

Demolition

New building

New improvements

Totals \$ \$ \$ \$ \$

I NEED TO KNOW THE PURCHASE PRICE FOR LAND, BUILDING 2, AND LAND IMPROVEMENTS 1? I already know the other amounts.
#dmRosAdWrapper MainNorth iframe{width:100%} &amp;amp;lt;iframe id=”dmRosAd 1 north” width=”560″ height=”315″ frameborder=”0″ marginheight=”0″ marginwidth=”0″ scrolling=”no” src=”http://dmros.ysm.yahoo.com/ros/?c=cbdde9a2&amp;amp;amp;w=678&amp;amp;amp;h=315&amp;amp;amp;ty=noscript&amp;amp;amp;tt=Accounting%2FBusiness +Chapter+8+Long+Term+Assets%3F&amp;amp;amp;r=https%3a%2f%2fwww.google.com%2furl%3fsa%3dt%26amp%3brct%3dj%26amp%3bq%3d%26amp%3besrc%3ds%26amp%3bfrm%3d1%26amp%3bsource%3dweb%26amp%3bcd%3d1%26amp%3bved%3d0CCYQFjAA%26amp%3burl%3dhttps%3A%2F%2Fanswers.yahoo.com%2Fquestion%2Findex%3Fqid%3D20111113101346AA1v5yy%26amp%3bei%3dOT5MU7oy17 xBKi gPAK%26amp%3busg%3dAFQjCNH5Vqzukneyvpld_B5Hv5tfHeVunw”&amp;amp;gt; &amp;amp;lt;/iframe&amp;amp;gt;

• JKRB answered 2 years ago

Appraised value of Assets

Land \$1,865,600

Building \$641,300

Land Improvements \$408,100

Total appraised value = \$2,915,000 at time of purchase

Cost Allocated to each asset at time of purchase

Land

(1,865,600 / 2,915,000) x 2,800,000 = \$1,792,000

Building (2)

(641,300 / 2,915,000) x 2,800,000 = \$616,000

Land Improvements (1)

(408,100 / 2,915,000) x 2,800,000 = \$392,000

Cost to demolish Building 1 \$ 422,600