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Required information [ The following information applies to the questions displayed below. ] On January 1 , Mitzu Company pays a lump - sum amount

Required information
[The following information applies to the questions displayed below.]
On January 1, Mitzu Company pays a lump-sum amount of $2,750,000 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 $85,000 salvage value. Land Improvements 1 is valued at $390,000 and is expected to
last another 13 years with no salvage value. The land is valued at $1,890,000. The company also incurs the following
additional costs.
Cost to demolish Building 1
Cost of additional land grading
Cost to construct Building 3, having a useful life of 25 years and a $398,000 salvage value 2,262,000
Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 173,000
Required:
Allocate the costs incurred by Mitzu to the appropriate columns and total each column.
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