You are the new controller for Jayson Company, which began operations on October 1, 1998, after a start-up period that ran from the middle of 1997 . While reviewing the accounts, you find an account entitled "Fixed Assets," which contains the following items:

In addition, you discover that cash receipts of \(\$ 1,200\) from selling materials salvaged from the old building were credited to Miscellaneous Revenues in 1998. Digging deeper, you find that the plant manager spent all of his time for the first nine months of 1998 supervising installation of land improvements ( \(10 \%\) ), building construction \((40 \%)\), and installation of machinery \((50 \%\) ). The plant manager's nine-month salary of \(\$ 108,000\) was debited to Officers' Salaries Expense.

a. List all items on a form containing columns for Land, Land Improvements, Building, and Machinery. Sort the items into the appropriate columns, omitting those items not properly included as an element of asset cost. Show negative amounts in parentheses. Total your columns.

b. Prepare one compound journal entry to reclassify and adjust the accounts and to eliminate the Fixed Assets account. Do not attempt to record depreciation for the partial year.

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Cash paid to previous owner of land and old building. Cash given to construction company as partial payment for the new building Lega' and title search fees. Real estate commission. Cost of demolishing old building Cost of leveling and grading Architect's fee (90% building and 10% improvements). Cost of excavating (digging) basement for new building Cash paid to construction company for new building. Repair damage done by vandals Sprinkler system for lawn Lighting system for parking lot Paving of parking lot Net invoice price of machinery Freight cost incurred on machinery Installation and testing of machinery Medical bill paid for employee injured in installing machinery Landscaping (permanent) Repair damage to building in installation of machinery. $ 192,000 72,000 2,400 14,400 16,800 9,600 36,000 21,600 288,000 7,200 31,200 40,800 60,000 1.152,000 50,400 19,200 3,600 38,400 4,800 Special assessment paid to city for water mains and sewer line. Account balance 45,600 $2,106,000