Problem1 On January 1, 20x1, Elsey Inc. purchased some land for $250,000 and paid related closing legal costs of $2,000. The land had an old warehouse on it that was immediately torn down at a cost of S5,000, which was partly paid for by selling salvage metal from the warehouse for $1,400. Elsey paid an architect $20,000 to design its new head office building and paid a contractor $400,000 to build the new head office. The new head office was completed and available for use on October 1, 20x1. Elsey also paid $400 per month in property insurance from January 1, 20x, to December 31, 20x1, to cover the risk of fire or flood damage during construction and occupancy Required- a. Allocate the costs incurred in 20x1 to land, building, and/or expense b. Calculate the amount of depreciation to be charged on the building in 20x1 and 20x2, assuming the building has an expected useful life of 25 years with a residual value of S30,000. Elsey would like you to do your calculations under the following two scenarios: straight-line depreciation, and diminishing balance depreciation at a rate of 8%. ii) . Assume that the diminishing balance method is used. On December 31, 20x13, Elsey sells the land and building for $400,000. Prepare the journal entry to record the sale. Assume that depreciation expense for the year ended December 31 20x 13 has been recorded