At December 31, 2020, certain accounts included in the property, plant, and equipment section of Hill Corporations balance sheet had the following balances:

Land $1,200,000

Buildings 2,600,000

Leasehold improvements 1,600,000

Machinery and equipment 3,200,000

During 2021, the following transactions occurred:

1. A tract of land (site 101) with a building was acquired for $1,200,000. The closing statement indicated that the land value was $800,000 and the building value was $400,000. Shortly after acquisition, the building was demolished at a cost of $80,000.

2. A new building was constructed for $600,000 plus the following costs:

Excavation fees 24,000

Architectural design fees 32,000

Building permit fee 8,000

The building was completed and occupied on September 30, 2021.

3. Extensive work was done to a building occupied by Hill under a lease agreement that expires on December 31, 2030. The total cost of the work was $500,000, as follows:

	Cost	Useful life item (years)
Painting of ceilings	$ 20,000	1
Electrical work	180,000	10
Construction of extension to current working area	300,000	25
	$500,000

The lessor paid half the costs incurred for the extension to the current working area.

4. A group of new machines was purchased subject to a royalty agreement, which requires payment of royalties based on units of production for the machines. The invoice price of the machines was $540,000, freight costs were $4,000, unloading costs were $6,000, and royalty payments for 2021 were $88,000.

Required:

Disregard the related accumulated depreciation accounts. Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2021: a. Land b. Buildings c. Leasehold improvements d. Machinery and equipment.

Question 4 Part C. (continued)

Analysis of Land Account
Balance at January 1, 2021	$1,200,000
Balance at December 31, 2021

Analysis of Buildings Account
Balance at January 1, 2021	$2,600,000
Balance at December 31, 2021

Analysis of Leasehold Improvements Account
Balance at January1, 2021	$1,600,000
Balance at December 31, 2021

Analysis of Machinery and Equipment Account
Balance at January 1, 2021	$3,200,000
Balance at December 31, 2021