Steve Nash Company was incorporated on January 2, 2009, but was unable to begin manufacturing activities until July 1, 2009, because new factory facilities were not completed until that date.
The Land and Building account at December 31, 2009, was as follows.

The following additional information is to be considered.
1. To acquire land and building the company paid $80,000 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair market value of the stock is $107 per share.
2. Cost of removal of old buildings amounted to $9,800, and the demolition company retained all materials of the building.
3. Legal fees covered the following.
Examination of title covering purchase of land ..... $1,910
Legal work in connection with construction contract ... 1,860
$3,770
4. Insurance premium covered the building for a 2-year term beginning May 1, 2009.
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, 2009, to June 30, 2009.
President€™s salary ................. $32,100
Plant superintendent covering supervision of new building ... 4,200
$36,300
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 $43,800, 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 2009€”1% of asset value (1% of $400,000, or $4,000).

Instructions
(a) Prepare entries to reflect correct land, building, and accumulated depreciation accounts at December 31, 2009.
(b) Show the proper presentation of land, building, and accumulated depreciation on the balance sheet at December 31,2009.

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$160,000 9,800 60,000 3,770 40,000 2,280 4,000 36,300 40,000 43,800 399,950 4,000 $395,950 January 31, 2009 Land and building February 28, 2009 Co of removal of building May 1, 2009 May 1, 2009 June 1, 2009 June 1, 2009 nsurance premium June 1, 2009 Special tax assessment Partial payment of new construction Legal fees paid Second payment on new construction June 30, 2009 December 31, 2009 December 31, 2009 General expenses Final payment on new construction Asset write-up July 1, 2009 Depreciation-2009 at 1% Account balance