Problem 10-01 a At December 31, 2019, certain accounts included in the property, plant, and equipment section of Buffalo Company's balance sheet had the following balances. Land $236,900 Buildings 909,400 Leasehold improvements 663,800 Equipment 879,100 During 2020, the following transactions occurred. 1. Land site number 621 was acquired for $855,900. In addition, to acquire the land Buffalo paid a $51,400 commission to a real estate agent. Costs of $44,500 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $18,100. 2. A second tract of land (site number 622) with a building was acquired for $418,200. The closing statement indicated that the land value was $298,000 and the building value was $120,200. Shortly after acquisition, the building was demolished at a cost of $41,200. A new building was constructed for $327,200 plus the following costs. Excavation fees Architectural design fees Building permit fee Imputed interest on funds used during construction (stock financing) The building was completed and occupied on September 30, 2020. $38,300 11,000 2,500 8,500 3. 4. 5. A third tract of land (site number 623) was acquired for $651,900 and was put on the market for resale. During December 2020, costs of $89,500 were incurred to improve leased office space. The related lease will terminate on December 31, 2022, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.) A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $86,400, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2020 were $17,300.