Reference no: EM13480707

Spitfire Company was incorporated on January 2, 2015, but was unable to begin manufacturing activities until July 1, 2015, because new factory facilities were not completed until that date.
January 31
Land and building

$163,600
February 28
Cost of removal of building

9,990
May 1
Partial payment of new construction

63,200
May 1
Legal fees paid

4,170
June 1
Second payment on new construction

47,700
June 1
Insurance premium

2,352
June 1
Special tax assessment

4,100
June 30
General expenses

38,300
July 1
Final payment on new construction

31,900
December 31
Asset write-up

58,900

424,212
December 31
Depreciation-2015 at 1%

4,045
December 31, 2015
Account balance

$420,167

1. To acquire land and building, the company paid $83,600 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $118 per share.
2. Cost of removal of old buildings amounted to $9,990, and the demolition company retained all materials of the building.
3. Legal fees covered the following.

Cost of organization

$650
Examination of title covering purchase of land

1,580
Legal work in connection with construction contract

1,940

$4,170
4. Insurance premium covered the building for a 2-year term beginning May 1, 2015.
5. The special tax assessment covered street improvements that are permanent in nature.
6. General expenses covered the following for the period from January 2, 2015, to June 30, 2015.

President's salary

$33,500
Plant superintendent's salary-supervision of new building

4,800

$38,300
7. Because of a general increase in construction costs after entering into the building contract, the board of directors increased the value of the building $58,900, believing that such an increase was justified to reflect the current market at the time the building was completed. Retained earnings was credited for this amount.
8. Estimated life of building-50 years.
Depreciation for 2015-1% of asset value (1% of $404,500, or $4,045).

Prepare entries to reflect correct land, building, and depreciation accounts at December 31, 2015. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Show the proper presentation of land, building, and depreciation on the balance sheet at December 31, 2015. (Round answers to 0 decimal places, e.g. 5,275.)