Mawn Company bought land and built a warehouse during the current year. It improperly debited the following related costs to an account titled Land and Buildings:

Land purchase $$22,000$

Demolition of old building $3,000$

Legal fees for land acquisition $1,500$

Avoidable interest on loan for construction $2,900$

Building construction $53,000$

Assessment by city for sewer connection$$city is responsible for maintenance $1,200$

Landscaping $($expected to be permanent in nature$)3,500$

Equipment purchased for excavation $18,800$

Pro rata portion of fixed overhead incurred during construction of building $15,000$

Insurance on building during construction $1,000$

Profit on construction $12,000$

Compensation for injury to construction worker $($not covered by the insurance policy purchased by Mawn$)3,000$

Modifications to building ordered by building inspectors $($due to poor planning by Mawn$)7,500$

Delinquent property taxes on land paid during the current year $($land was purchased during the year$)2,500$

Required:

Prepare the correcting entries on December $31$ to properly reclassify the preceding items.

CHART OF ACCOUNTS

Mawn Company

General Ledger

ASSETS

$111$ Cash

$121$ Accounts Receivable

$141$ Inventory

$152$ Prepaid Insurance

$170$ Land and Buildings

$171$ Land

$181$ Building

$185$ Equipment

$198$ Accumulated Depreciation

LIABILITIES

$211$ Accounts Payable

$231$ Salaries Payable

$250$ Unearned Revenue

$261$ Income Taxes Payable

EQUITY

$311$ Common Stock

$331$ Retained Earnings

REVENUE

$411$ Sales Revenue

$883$ Gain on Construction

EXPENSES

$500$ Cost of Goods Sold

$511$ Insurance Expense

$512$ Utilities Expense

$521$ Salaries Expense

$532$ Bad Debt Expense

$540$ Interest Expense

$541$ Depreciation Expense

$559$ Miscellaneous Expenses

$894$ Loss Due to Worker$$s Injury

$895$ Loss Due to Modifications to Building

$910$ Income Tax Expense

Prepare the correcting entries on December $31$ to properly reclassify the costs from the Land and Buildings account.

General Journal Instructions

PAGE $21$

GENERAL JOURNAL

DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT

Dec. $31$

Land

$22,000\mathrm{.}00$

Cash

$22,000\mathrm{.}00$

Dec. $31$

Building

$3,000\mathrm{.}00$

Land and Buildings

$3,000\mathrm{.}00$

Dec. $31$