Required information Problem 8-3A Asset cost allocation; straight-line depreciation LO C1, P1 [The following information applies to the questions displayed below) In January 2017 Mitzu Co, pays $2,600,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place Building 2 will be a company office, it is appraised at $644,000, with a useful life of 20 years and a $60,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $420,000 that are expected to last another 12 years with no salvage value Without the buildings and improvements, the tract of land is valued at $1,736,006. The company also incurs the following additional costs: $328,400 175,400 2,202,800 Cost to demolish Building 1 Cost of additional land grading Cost to construct new building (Building 3), having a useful life of 25 years and a $392,008 salvage value Cost of new land improvements (Land Improvements 2) near Building 2 having a 28-year useful life and no salvage value 164,000 Required information Required: 1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column. Allocation of Purchase Price Appraised Value Total Cost of Acquisition Apportioned Cost $ Land Building 2 Land Improvements 1 Totals 1,736,000 644,000 420,000 2,800,000 Percent of Total Appraised Value 62% x 23% 15% x 100% $ 2,600,000 2,600,000 2 600,000 HA $ $ 0 Land Building 2 Building 3 Land Land Improvements 1. Improvements 2 $ 598,000 0 Purchase Price Demolition Land grading New building (Construction cost) New improvements Totals 1.612.000 328.400 175.400 0 0 0 0 2 115,800 $ 0 598,000 $ $ $ 0 $