the mawn company bought land and built a warehouse during 254311

The Mawn Company bought land and built a warehouse during 2007. It debited the following related costs to an account titled Land and Buildings:

Land purchase …………………………………………………………$22,000

Demolition of old building …………………………………………… 3,000

Legal fees for land acquisition ……………………………………….. 1,500

Interest on loan for construction (based on average costs incurred) …. 2,900

Building construction ………………………………………………… 53,000

Assessment by city for sewer connection ……………………………. 1,200

Landscaping ………………………………………………………….. 3,500

Equipment purchased for excavation ………………………………… 18,800

Fixed overhead charged to building ………………………………….. 15,000

Insurance on building during construction …………………………… 1,000

Profit on construction ………………………………………………… 12,000

Compensation for injury to construction worker ……………………… 3,000

Modifications to building ordered by building inspectors ……………. 7,500

Property taxes on land paid in 2007 …………………………………… 2,500

The following credits were made to the account:

Salvage from demolished old building ………………………………… $ 700

Sale of excavation equipment …………………………………………. 14,000

In addition, you discover that compensation for the worker’s injury was necessary because it was not covered by the particular insurance policy purchased by the company. Accident insurance that would have covered the injury would have cost an additional $350. The modifications ordered by the building inspectors resulted from poor planning by the company.

Required

Prepare adjusting entries on December 31, 2007 to properly reclassify the preceding items.

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