Merchant Company purchased property for a building site. The costs associated with the property were:

Purchase price	$	190,000
Real estate commissions		16,500
Legal fees		2,300
Expenses of clearing the land		3,500
Expenses to remove old building		2,500

What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?

• $214,800 to Land; $0 to Building.

• $208,800 to Land; $2,500 to Building.

• $212,300 to Land; $0 to Building.

• $192,300 to Land; $24,800 to Building.

• $206,500 to Land; $8,300 to Building.