Required information

Problem $8-3$A $($Algo$)$ Asset cost allocation; straight$-$line depreciation LO C$1,$ P$1$

$[$The following information applies to the guestions displayed below.$]$

On January $1,$ Mitzu Company pays a lump$-$sum amount of $$2,600,000$ for land, Building $1,$ Building $2,$ and Land Improvements $1.$ Building $1$ has no value and will be demolished. Building $2$ will be an office and is appraised at $$793,000,$ with a useful life of $20$ years and a $$75,000$ salvage value. Land Improvements $1$ is valued at $$427,000$ and is expected to last another $14$ years with no salvage value. The land is valued at $$1,830,000.$ The company also incurs the fotlowing additional costs.

Cost to demolish Building $1$

Cost of additional land grading

Cost $to$ construct Building $3,$ having a useful life $of25$ years and $a$ $$398,000$ salvage value $2,302,000$

Cost $168,000$

cost of new Land Improvements $2,$ having a $20-$year useful life and no salvage value

$$340,400$

$189,400$

$2,302,000$

$168,000$

Problem $8-3$A $($Algo$)$ Part $1$

Required:

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