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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

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