Merchant Company purchased property for a building site. The…

Merchant Company purchased property for a building site. The costs associated with the property were: Purchase Price                                             $ 185,000 Real estate commission                                 $  15,000 Legal fees                                                    $      700 Expenses of clearing the land                         $    2,000 Expenses to remove the old building               $    4,000   What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?