On 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 $720,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $480,000 and is expected to last another 16 years with no salvage value. The land is valued at $1,800,000. The company also incurs the following additional costs.

Cost to demolish Building 1$342,400Cost of additional land grading195,400Cost to construct Building 3, having a useful life

of 25 years and a $402,000 salvage value2,262,000Cost of new Land Improvements 2

having a 20-year useful life and no salvage value173,000

Required:

1.Allocate the costs incurred by Mitzu to the appropriate columns and total each column.