Sheffield 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 $168,500

February 28 Cost of removal of building 9,877

May 1 Partial payment of new construction 62,570

May 1 Legal fees paid 4,590

June 1 Second payment on new construction 47,700

June 1 Insurance premium 2,280

June 1 Special tax assessment 4,130

June 30 General expenses 35,598

July 1 Final payment on new construction 28,230

December 31 Asset write-up 55,431

418,906

December 31 Depreciation-2021 at 1% (3,701)

December 31, 2021 Account balance $415,205

The following additional information is to be considered.

1. To acquire land and building, the company paid $88,500 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $124 per share.

2. Cost of removal of old buildings amounted to $9,877, and the demolition company retained all materials of the building.

3. Legal fees covered the following.

Cost of organization $680

Examination of title covering purchase of land 1,680

Legal work in connection with construction contract 2,230

$4,590

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 $31,503

Plant superintendent's salary-supervision of new building 4,095

$35,598

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 $55,431, 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. Estimated life of building-50 years.

Depreciation for 2021-1% of asset value (1% of $370,100, or $3,701).

Collapse question part

(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. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No. Account Titles and Explanation Debit Credit

1.

2.