Reference no: EM132194031

Question - At December 31, 2016, certain accounts included in the property, plant, and equipment section of Larkspur Company's balance sheet had the following balances.

Land $238,200

Buildings 905,200

Leasehold improvements 661,900

Equipment 883,800

During 2017, the following transactions occurred.

1. Land site number 621 was acquired for $850,800. In addition, to acquire the land Larkspur paid a $53,000 commission to a real estate agent. Costs of $36,200 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $20,400.

2. A second tract of land (site number 622) with a building was acquired for $417,500. The closing statement indicated that the land value was $297,500 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $331,400 plus the following costs.

Excavation fees $37,700

Architectural design fees 11,100

Building permit fee 2,500

Imputed interest on funds used during construction (stock financing) 8,600

The building was completed and occupied on September 30, 2017.

3. A third tract of land (site number 623) was acquired for $650,800 and was put on the market for resale.

4. During December 2017, costs of $89,300 were incurred to improve leased office space. The related lease will terminate on December 31, 2019, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)

5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $86,200, freight costs were $3,300, installation costs were $2,300, and royalty payments for 2017 were $17,600.

Required - Calculate the balance at December 31, 2017 in each of the following balance sheet accounts. Disregard the related accumulated depreciation accounts.