On January 1, Mitzu Company 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 $796,500, with a useful life of 20 years and a $70,000 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 $1,740,500. The company also incurs the following additional costs.

Cost to demolish Building 1	$ 346,400
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	2,222,000
Cost of new Land Improvements 2, having a 20-year useful life and no salvage value	173,000

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

Allocation of Purchase Price Land Building 2 Land Improvements 1 Totals Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals Appraised Value Land Percent of Total Appraised Value Building 2 X Total cost of acquisition Building 3 = = = = Apportioned Cost Land Improvements 1 Land Improvements 2