Reference no: EM132493921

Question - At December 31, 2019, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following balances.

Land $230,000 Buildings 890,000 Leasehold improvements 660,000 Equipment 875,000

During 2020, the following transactions occurred.

1. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.

2. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs.

Excavation fees$38,000 Architectural design fees 11,000 Building permit fee 2,500 Imputed interest on funds used during construction (stock financing)8,500

The building was completed and occupied on September 30, 2020.

3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale.

4. During December 2020, costs of $89,000 were incurred to improve leased office space. The related lease will terminate on December 31, 2022, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)

5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2020 were $17,500.

Required - Calculate the balance at December 31, 2020 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts.