Scarlett Incorporated purchased a tract of land with an office building and equipment included. The cash price was $900,000 plus $50,000 in fees connected with the purchase. The following data were collected concerning the property: Land Equipment Office building Appraisal Value $220,000 360,000 440,000 Vendor's Book Value $ 80,000 170,000 260,000 Original Cost $ 80,000 550,000 720,000 Required: Give the entry to record the purchase; show computations. 1 Debit Credit At December 31, 2020, certain accounts included in the property, plant, and equipment section of Hill Corporations balance sheet had the following balances: Land Buildings Leasehold improvements Machinery and equipment $1,200,000 2,600,000 1,600,000 3,200,000 During 2021, the following transactions occurred: a. A tract of land (site 101) with a building was acquired for $1,200,000. The closing statement indicated that the land value was $800,000 and the building value was $400,000. Shortly after acquisition, the building was demolished at a cost of $80,000. b. A new building was constructed for $600,000 plus the following costs: Excavation fees 24,000 Architectural design fees 32,000 Building permit fee 8,000 The building was completed and occupied on September 30, 2021. c. Extensive work was done to a building occupied by Hill under a lease agreement that expires on December 31, 2030. The total cost of the work was $500,000, as follows: Useful life Cost item (years) Painting of ceilings $ 20.000 1 Electrical work 180,000 10 Construction of extension to current working 300,000 25 area $500,000 The lessor paid half the costs incurred for the extension to the current working area. d. A group of new machines was purchased subject to a royalty agreement, which requires payment of royalties based on units of production for the machines. The invoice price of the machines was $540,000, freight costs were $4,000, unloading costs were $6,000, and royalty payments for 2021 were $88,000. Required: Disregard the related accumulated depreciation accounts. Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2021: a. Land b. Buildings Leasehold improvements d. Machinery and equipment. c. a. Analysis of Land Account Balance at January 1, 2021 $1,200,000 Balance at December 31, 2021 b. Analysis of Buildings Account Balance at January 1, 2021 $2,600,000 Balance at December 31, 2021 c. Analysis of Leasehold Improvements Account Balance at January1, 2021 $1,600,000 Balance at December 31, 2021 d. Analysis of Machinery and Equipment Account Balance at January 1, 2021 $3,200,000 Balance at December 31, 2021 9