Determine the proper balances as of 123114 for a separate

Reference no: EM13580053

Gibbs Manufacturing Co. was incorporated on 1/2/14 but was unable to begin manufacturing activities until 8/1/14 because new factory facilities were not completed until that date. The Land and Buildings account at 12/31/14 per the books was as follows:

Date	Item	Amount
1/31/14	Land and dilapidated building	$200,000
2/28/14	Cost of removing building	3,900
4/01/14	Legal fees	6,190
5/01/14	Fire insurance premium payment	5,112
5/01/14	Special tax assessment for streets	4,780
5/01/14	Partial payment of new building construction	188,900
8/01/14	Final payment on building construction	188,900
8/01/14	General expenses	30,800
12/31/14	Asset write-up	74,000
		$702,582

Additional information:

To acquire the land and building on 1/31/14, the company paid $100,000 cash and 1,000 shares of its common stock (par value = $100/share) which is very actively traded and had a fair value per share of $160.

When the old building was removed, Gibbs paid Kwik Demolition Co. $3,900, but also received $1,460 from the sale of salvaged material.

Legal fees covered the following:

Cost of organization		$2,600
Examination of title covering purchase of land		2,190
Legal work in connection with the building construction		1,400
		$6,190

The fire insurance premium covered premiums for a three-year term beginning May 1, 2014.

General expenses covered the following for the period 1/2/14 to 8/1/14.

President's salary		$20,700
Plant superintendent covering supervision of new building		10,100
		$30,800

Because of the rising land costs, the president was sure that the land was worth at least $74,000 more than what it cost the company.

Determine the proper balances as of 12/31/14 for a separate land account and a separate buildings account.

Land		$
Buildings		$

Reference no: EM13580053

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