Cergo Computers constructed a new training center in 2014, which you have been hired to manage. A review of the accounting records shows the following expenditures debited to an asset account called Training Center:

Attorney’s fee, land acquisition .........$ 34,900

Cost of land .................. 598,000

Architect’s fee, building design .......... 102,000

Building ................... 1,020,000

Parking lot and sidewalk ............ 135,600

Electrical wiring, building ........... 164,000

Landscaping ................... 55,000

Cost of surveying land .............. 9,200

Training equipment, tables, and chairs ........ 136,400

Installation of training equipment .......... 68,000

Cost of grading the land ............ 14,000

Cost of changes in building to soundproof rooms .. 59,200

Total account balance ............. $2,396,300

During the center’s construction, an employee of Cergo worked full-time overseeing the project. He spent two months on the purchase and preparation of the site, six months on the construction, one month on land improvements, and one month on equipment installation and training-room furniture purchase and setup. His salary of $64,000 during this ten-month period was charged to Administrative Expense. The training center was placed in operation on November 1.

Required

1. Prepare a schedule with the following four column (account) headings: Land, Land Improvements, Building, and Equipment. Place each of the above expenditures in the appropriate column. Total the columns.

2. What impact does the classification of the items among several accounts have on evaluating the profitability performance of the company?