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Keona Co: calculate costs incurred, journal entry and adjusting entries to record depreciation

In January of 2005 Keona Co pays 2800000 for a tract of land with two buildings on it. it plans to demolish building one and build a new store. Building two will be a company office it is appraised at 641300 with a usefull life of 20 years and an 80000 salvage value. Without the buildings and improvements the tract of land is valued at 1865600 Keona also has the followin costs
demolish building 1 422600
grading cost 167200
cost of new buil
construction 219000
cost of new land
improvements 158000

1. prepare a table with the following column headings Land, Building 2, Building 3, Land improv 1, Land Improvments 2. Allocate the costs incurred by Keona to the appropriate columns and total each column ( round percents to the nearest 1%)

2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on Jan 1 2005

3. Using the straight line method prepare dec 31 adjusting entries to record depreciation for the 12 months of 2005 when these assets where in use

Solution Summary

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