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University Of Texas At Austin Operations And Supply Chain Management Assignment Help - Depreciation


Question - In January 2013, Mitzu 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 $600,000, 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 $630,000 that are expected to
last another 21 years with no salvage value. W ithout the buildings and improvements, the tract of land
is valued at $1,770,000. The company also incurs the following additional costs:
Cost to demolish Building 1 $347,400
Cost of additional land grading 187,400
Cost to construct new building (Building 3), having a useful life of 25 years a ...Read More

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