10-3A (Algo) Asset cost allocation; straight-line depreciation LO C1, P1 [The following information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 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 $823.500, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $396.500 and is expected to last another 13 years with no salvage value. The land is valued at $1,830,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cost of additional land grading Cost to construct Building 3, having a useful life of 25 years and a $398,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value $ 342,400 191,400 2,222,000 173,000 Problem 10-3A (Algo) Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Percent of Appraised Allocation of Purchase Price Value Total Appraised Value Land Building 2 Land Improvements 1 Totals Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals 0% x Total cost of acquisition Apportioned Cost = $ Land Building 2 Building 3 Land Improvements 1 Land Improvements 2 0 $ os 0 $ 0 $ 0 0