Accounting practice problem 4On January 1, Mitzu Co. 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 $678,500, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $413,000 and is expected to last another 14 years with no salvage value. The land is valued at $1,858,500. The company also incurs the following additional costs.

4 Cost to demolish Building 1 $ Cost of additional land grading 346, 400 191, 400 Cost to construct Building 3, having a useful life Part 1 of 3 of 25 years and a $400, 000 salvage value 2 , 242 , 000 Cost of new Land Improvements 2 having a 20-year useful life and no salvage value 168 , 000 3.33 points Required: eBook 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. References Percent of Allocation of purchase price Appraised Total Total cost of Value Appraised X acquisition Apportioned Cost Value Land X Building 2 X Land Improvements 1 Totals Land Building 2 Building 3 Land Land Improvements 1 Improvements 2 Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals Mc Graw