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On January 1, Mitzu Company pays a lump-sum amount of $2,700,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no
On January 1, Mitzu Company pays a lump-sum amount of $2,700,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Bullding 2 will be an office and is appraised at $678,500. with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $442,500 and is expected to last another 15 years with no salvage value. The land is valued at $1,829,000. The company also incurs the following additional costs. Cost to demolish Building 1 Cost of additions 1 and grading Cost to construct Building 3 , having a useful life of 25 yeara and a $402,000 salvage value Cost of new Land Inprovements 2, having a 20 -year useful life and no salvage value \$ 341,400 193,400 2,242,000 178,000 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column
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