Problem 8-3A Asset cost allocation; straight-line depreciation LO C1, P1 The following information applies to the questions displayed below) 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 $690,000, with a useful life of 20 years and a $80,000 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 $1,830,000. The company also incurs the following additional costs. $ 346) 400 187,400 Cost to demolish Building 1 Cost of additional land grading Cont to construct Building 3, having a useful life of 25 years and a $398,000 salvage value Cost of new Land Improvements 2 having a 20-year useful life and no salvage value 2,202,000 168,000 Problem 8-3A Part 1 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of purchase price Appraised Value Percent of Total Appraised Value Total cost of acquisition Apportioned Cost Land $ 1,830,000 690,000 X X Building 2 Land Improvements Totals $ 2,520,000 0% $ Land Building 2 Building 3 Land Improvements 1 Land Improvements 2 Purchase Price Demolition Land grading New building (Construction cost) New improvements