The following cases are independent.

Case A Starling Ltd. bought a building for $1,060,000. Before using the building, the following expenditures were made:

Repair and renovation of building .......................................................    $105,000

Construction of new paved driveway ..................................................        27,500

Upgraded landscaping ...........................................................................         4,200

Wiring ......................................................................................................        16,000

Deposits with utilities for connections ...............................................           2,500

Sign for front and back of building, attached to roof ......................          13,000

Installation of fence around property ...............................................          14,000

Case B Lark Company purchased a $32,500 tract of land for a new manufacturing facility. Lark demolished an old building on the property and sold the materials it salvaged from the demolition. Lark incurred additional costs and realized salvage proceeds as follows:

Demolition of old building .................................................................        $31,000

Routine maintenance (mowing) done on purchase.........................           2,500

Proceeds from sale of salvaged materials ........................................         11,200

Legal fees ...............................................................................................           9,000

Title guarantee insurance ....................................................................           5,600

Required:

1. What balance would Starling report in the building account? List components separately.

2. What balance should Lark report in the land account? Land improvements?

3. If any items in the list above are excluded from the building and land accounts, indicate the appropriate classification.