P10.3 (L01, 3) (Classification of Land and Building Costs) Spitfire SE started as a company on January 2, 2020, but was unable to begin manufacturing activities until July 1, 2020, because new factory facilities were not completed until that date. The Land and Buildings account reported the following items during 2020 January 31 Land and building 160,000 February 28 Cost of removal of building 9,800 May 1 Partial payment of new construction 60,000 May 1 Legal fees paid 3,770 June 1 Second payment on new construction 40,000 June 1 Insurance premium 2.280 June 1 Special tax assessment 4,000 June 30 General expenses 36,300 July 1 Final payment on new construction 30,000 December 31 Asset write-up 53.800 399,950 December 31 Depreciation-2020 at 1% 4.000 December 31, 2020 Account balance 395,950 The following additional information is to be considered. The following additional information is to be considered. 1. To acquire land and building, the company paid 80,000 cash and 800 shares of its 8% preference shares, par value 100 per share. The shares trade in an active market at 117 per share. 2. Cost of removal of old buildings amounted to 9,800, and the demolition company retained all materials of the building, 3. Legal fees covered the following. Cost of organization 610 Examination of title covering purchase of land 1,300 Legal work in connection with construction contract 1.860 3.770 4. Insurance premium covered the building for a 2-year term beginning May 1, 2020 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, 2020, to June 30, 2020 President's salary 32.100 Plant superintendent's salary-supervision of new building 4,200 36.300 7. Because of a general increase in construction costs after entering into the building contract, the board of directors increased the value of the building 53,800, believing that such an increase was justified to reflect the current market at the time the building was completed, Retained earnings was credited for this amount 8. Depreciation for 2020-1% of asset value (1% of 400,000, or 4,000). Instructions a. Prepare entries to reflect correct land, buildings, and depreciation accounts at December 31, 2020. b. Show the proper presentation of land, buildings, and depreciation on the statement of financial position at December 31, 2020