Mawn Company bought land and built a warehouse during 2016. It improperly debited the following related costs to an account titled Land and Buildings:
Land purchase.......................... $ 22,000
Demolition of old building........................ 3,000
Legal fees for land acquisition..................... 1,500
Avoidable interest on loan for construction................ 2,900
Building construction........................ 53,000
Assessment by city for sewer connection— city is responsible for maintenance... 1,200
Landscaping (expected to be permanent in nature)............. 3,500
Equipment purchased for excavation.................. 18,800
Pro rata portion of fixed overhead incurred during construction of building.. 15,000
Insurance on building during construction................. 1,000
Profit on construction....................... 12,000
Compensation for injury to construction worker (not covered by the insurance policy purchased by Mawn)........................ 3,000
Modifications to building ordered by building inspectors (due to poor planning by Mawn) ...............................7,500
Deliquent property taxes on land paid in 2016 (land was purchased during the year) .................................2,500
Required:
Prepare the correcting entries on December 31, 2016, to properly reclassify the preceding items.