Required information [The following information applies to the questions displayed below.] 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 $750,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $420,000 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 following additional costs. Cost to demolish Building 1 Cost of additional land grading $ 344,400 Cost to construct Building 3, having a useful life of 25 years and a $402,000 salvage value Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 189,400 2,222,000 178,000 Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Answer is complete but not entirely correct. Percent of Allocation of Purchase Price Land Building 2 Land Improvements 1 Totals Appraised Value Total Appraised Value Total cost of acquisition = $ 1,830,000 69% xx $ 2,650,000 = 69 750,000 28% X 2,650,000 = 420,000 16% x 2,650,000 = $ 3,000,000 113% $ Apportioned Cost 1,828,500 742,000 x 424,000 2,994,500 Land Building 2 Building 3 Land Improvements Land Improvements 1 2 Purchase Price $ 1,828,500 $ 742,000 $ 0 $ 742,000 $ 0 Demolition Land grading 344,400 0 0 0 189,400 0 0 0 0 New building (Construction cost) 0 0 2,222,000 0 0 New improvements Totals 0 0 0 0 178,000 $ 2,362,300 $ 742,000 $ 2,222,000 $ 742,000 178,000