Johnson Company acquires land and building for $4,000,000 including all fees related to acquisition. The land is appraised at $2,700,000 and the building at $2,100,000. The building is then renovated at a cost of $750,000. What amount is capitalized to the building account?
a. $2,500,000.
b. $2,078,125.
c. $2,375,000.
d. None of the above