The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale apparel business. The receipts are identified by an asterisk. a. Architects and engineers fees for plans and supervision $ 75,000 b. Cost of filling and grading land 18,000 c. Cost of removing building purchased with land in (e) 12,500 d. Cost of paving parking lot to be used by customers 14,500 e. Cost of real estate acquired as a plant site: Land ($375,000) and Building ($25,000) 400,000 f. Cost of repairing windstorm damage during construction 7,000 g. Cost of repairing vandalism damage during construction 1,800 h. Cost of trees and shrubbery planted 12,000 i. Delinquent real estate taxes on property, assumed by purchaser 31,750 j. Fee paid to attorney for title search 1,500 k. Finders fee paid to real estate agency 4,000 l. Interest incurred on building loan during construction 40,000 m. Money borrowed to pay building contractor 775,000* n. Payment to building contractor for new building 800,000 o. Proceeds from insurance company for windstorm and vandalism damage 4,500* p. Premium on one-year insurance policy during construction 6,000 q. Proceeds from sale of salvage materials from old building 6,500* r. Refund of premium on insurance policy (p) canceled after 10 months 1,000* s. Special assessment paid to city for extension of water main to the property 9,000 Instructions 1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Indicate receipts by an asterisk. Identify each item by letter and list the amounts in columnar form, as follows: Item Land Land Improvements Building Other Accounts 2. Determine the increases to Land, Land Improvements, and Building. 3. The costs assigned to the land, which is used as a plant site, will not be depreciated, while the costs assigned to land improvements will be depreciated. Explain this seemingly contradictory application of the concept of depreciation.