#1. Capitalizing acquisition costs. Gibbs Manufacturing Co. was incorporated on 7 but was unable to begin manufacturing activities until 8/1/17 because new factory facilities were not completed until that Land and Buildings account at 12/31/17 per the books was as follows: date. The $200,000 1/31/17 Land and dilapidated building 4,000 2/28/17 Cost of removing building Legal fees 5,400 Fire insurance premium payment 4,500 5/1/17 Special tax assessment for streets 210,000 Partial payment of new building construction 210,000 Final payment on building construction 30.000 General expenses 12/31/17 Asset write-up Additional information 1. To acquire the land and building on 1/31/17, the company paid $100,000 cash and 1,000 shares of its common st (par value S100/share) which is very actively traded and had a fair value of$180. 2. When the old building was removed, Gibbs paid Kwik Demolition Co. $4,000, but also received $1,500 from the sale of salvaged material. 3. Legal fees covered the following: $2,500 Cost of organization Examination of title covering purchase of land Legal work in connection with the building construction premium covered premiums for a three-year term beginning May 1, 4. The fire insurance 2017 General expenses covered the following for the period 1/2/17 to 8/1/17. 5. $20,000 President's salary building Plant superintendent covering supervision of new 6. Because the rising land costs, the president was sure that the land was worth at least of $75,000 more than what it cost the company