(Classification of Land and Building Costs)                                                       Spitfire Company was incorporated on January 2, 2015, but was unable to begin manufacturing activities until July 1, 2015, because new factory facilities were not completed until that date. The Land and Buildings account reported the following items during 2015.                           Jan-31 Land and buildings $160,000                   Feb-28 Cost of removal of building 9,800                   May-01 Partial payment of new construction 60,000                   May-01 Legal fees paid 3,770                   Jun-01 Second payment on new construction 40,000                   Jun-01 Insurance premium 2,280                   Jun-01 Special tax assessment 4,000                   Jun-30 General expenses 36,300                   July 1 Final payment on new construction 30,000                   Dec-31 Asset write-up 53,800                       399,950                   Dec-31 Depreciation—2015 at 1% 4,000                   December 31, 2015   Account balance $395,950                                                 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% cumulative preferred stock, par value $100 per share. Fair value of the stock is $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, 2015.               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, 2015, to June 30, 2015.                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.   Estimated life of building—50 years.                         Depreciation for 2015—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, 2015.             (b)    Show the proper presentation of land, buildings, and depreciation on the balance sheet at December 31, 2015.