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P10.2 (LO 1, 5) (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporations statement of financial position at December 31, 2021, had the following balances. Land $ 300,000 Land improvements 140,000 Buildings 1,100,000 Equipment 960,000 During 2022, the following transactions occurred. 1. A tract of land was acquired for $150,000 as a potential future building site. 2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobos ordinary shares. On the acquisition date, Lobos shares had a closing market price of $37 per share on a national exchange. The plant facility was carried on Mendotas books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000. 3. Items of equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows. Freight and unloading $13,000 Sales taxes 20,000 Installation 26,000 4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the companys various plant locations. These expenditures had an estimated useful life of 15 years. 5. Equipment costing $80,000 on January 1, 2014, was scrapped on June 30, 2022. Straight-line depreciation has been recorded on the basis of a 10-year life with no residual values. 6. Equipment was sold for $20,000 on July 1, 2022. Original cost of the equipment was $44,000 on January 1, 2019, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a residual value of $2,000.

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