Cuadrado Company paid cash and purchased the assets of Bonucci Company at an auction for $4,800,000 on October 1, 2020. The information on the book values of the assets on Bonuccis balance sheet is listed below:

Land: $820,000

Building: $1,118,000

Inventory: $530,000

Machine: $780,000

Based on an independent appraisal, the fair value of inventory is determined to be equal to its book value, and the fair values of land, building and machine are determined to be $1,850,000, $3,400,000 and $220,000, respectively. In the entry made by Cuadrado on October 1, 2020 to record the purchase, the cost of the building will be approximately:

Multiple Choice

• $2,776,667

• $2,720,000

• $1,652,217

• $1,686,638