Gastor Company was incorporated on January 2, 2021, but was unable to begin manufacturing activities until July 1, 2021, because new factory facilities were not completed until that date.

The land and buildings account reported the following items during 2021.

January 31 Land and buildings $164,600

February 28 Cost of removal of building 9,909

May 1 Partial payment of new construction 62,340

May 1 legal fees paid 4,460

June 1 Second payment on new construction 44,000

June 1 Insurance premium 2,280

June 1 Special tax assessment 3,780

June 30 General expenses 35,298

July 1 Final payment on new construction 30,160

December 31 Asset write-up 48,889

Total 405,716

December 31 Depreciation - 2021 at 1% (4,231)

December 31, 2021 Account balance $401,485

The following additional information is to be considered.

1. To acquire land and building, the company paid $84,600 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $127 per share.

2. Cost of removal of old buildings amount to $9,909 and the demolition company retained all materials of the building.

3. Legal fees covered the following:

Cost of organization $620

Examination of title covering purchase of land $1,690

Legal work in connection with construction contract $2,150

Total $4,460

4. Insurance premium covered the building for a 2-year term beginning May 1, 2021.

5. The special tax assessment covered street improvements that are permanent in nature.

6. General expenses covered the following for the period from January 2, 2021, to June 30, 2021

President's salary $31,365

Plant superintendent's salary supervision of new building $3,933

Total $35,298

7. Because of a general increase in constuction costs after entering into the building contract, the board of directors increased the value of the building $48,889 believing that such an increase was justified to reflect the current market at the tim the building was completed. Retained earnings was credited for this amount.

8. Estimated life of building - 50 years

Depreciation for 2021 - 1% of asset value (1% of $423,100, or $4,231).

(a) Prepare entries to reflect correct land, buildings, and depreciation accounts at December 31, 2021 (round answers to 0 decimal places e.g., 5,275. if no entry is required select 'no entry' and enter 0 for amounts).

(b) Prepare a balance sheet

Please show your work. Thank you