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On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 for land, Building 1,...

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Accounting

On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 for land, Building 1, Building 2, and Land Improvements 1 . Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $737,500, with a useful life of 20 years and a $85,000 salvage value. Land Improvements 1 is valued at $472,000 and is expected to last another 16 years with no salvage value. The land is valued at $1,740,500. The company also incurs the following additional costs. Cost to demolish Building 1 $345,400. Cost of additional land grading 191,400. Cost to construct Building 3 , having a useful life of 25 years and a $402,000 salvage value 2,262,000Cost of new Land Improvements 2, having a 20 year useful life and no salvage value 168,000. 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.

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