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On January 1, Mit Company pays a lump-sum amount of $2,750,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no

On January 1, Mit 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 $720,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $510,000 and is expected to last another 17 years with no salvage value. The land is valued at $1,770,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 342,400 Cost of additional land grading 189,400 Cost to construct Building 3, having a useful life of 25 years and a $398,000 salvage value 2,202,000 Cost of new Land Improvements

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