P10-1 (LO1) Classification of Acquis ition and Other Asset Costs A December 31, 2019, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the followina balances. Instructions: (a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2020 Land Land $ 230,000 Buildings Leasehold improvements Machinery and equipment 890.000 660,000 875.000 Buildings Leasehold Improvements Equipment Disregard the related accumulated depreciation accounts. During 2020. the following transactions occurred 1. Cost of land site number 621 acquired Commission to a real estate agent to acquire land Cost of clearing land Sale of timber and gravel that were recovered during the land dearing $ 850,000 REAGANCOMPANY Aruty l r Acct f 20 51,000 35.000 13,000 2. Second tract of land (site number 622) with a buiding Land value as indicated on the closing statement Buiding value Cost of demolition of the building shortly after acquisition Cost of new bulding constructed Additional costs of constructing building: $ 420.000 300.000 eas indicated on the dosing statement 120.000 41,000 330.000 38,000 11.000 Excavation fees Achitectural design fees Building permit fees Imputed interest on funds used during construction (stock financing) Completion and occupancy date of building 2,500 8,500 Set. 30, 2020 FREACAN OOMPANY Aru d Le t mr t Accant kr 220 3. Acquisition of a third tract of land (site number 623) (Put on the market for resa S 650,000 REAGAN COMPANY Auy c L AcEu r $ 89,000 4. Costs of improving leased office during December 2020. The related lease will terminate on December 31. 2022. and is not expected to be renewed. (Hint: Leas ehold improvements should be handled in thesame manner as land improvemens.) b L n iacn wer l d kacrr r r (et , wr f.Ita it ta i in F rta fir latern 5. Purchase of a group of new machines under a royaty agreement that provides for pavment of rovaties based on units of production for the Invoice price of the machines 87,000 3,300 Freight costs Installation costs Royaty payments for 2020 2,400 17,500 (AICPA adapted)