On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a buiding for $710,000. Additionally, Blackstone paid a real estate broker's commission of $47,000, legal fees of $6,500, and title insurance of S$23,500. The closing statement indicated that the land value was $555,000 and the building value was $155,000. Shortly after acquisition, the building was razed at a cost of $86,000. Blackstone entered into a $4.100,000 fixed-price contract with Barnett Builders, Inc., on March 1, 2021, for the construction of an office building on land site 11. The building was completed and occupied on September 30, 2022. Additional construction costs were incurred as follows: Plans, specifications, and blueprints Architects fees for design and supervision $23,000 95, 000 To finance the construction cost, Blackstone borrowed $4,100,000 on March 1, 2021. The loan is payable in 10 annual installments of $410,000 plus interest at the rate of 12%. Blackstone's average amounts of accumulated building construction expenditures were as follows: For the period March 1 to December 31, 2021 For the period January 1 to September 30, 2022 $1,010,000 2,850, 000 Required: 1. Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022. 2. Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2022.
On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a buiding for $710,000. Additionally, Blackstone paid a real estate broker's commission of $47,000, legal fees of $6,500, and title insurance of S$23,500. The closing statement indicated that the land value was $555,000 and the building value was $155,000. Shortly after acquisition, the building was razed at a cost of $86,000. Blackstone entered into a $4.100,000 fixed-price contract with Barnett Builders, Inc., on March 1, 2021, for the construction of an office building on land site 11. The building was completed and occupied on September 30, 2022. Additional construction costs were incurred as follows: Plans, specifications, and blueprints Architects fees for design and supervision $23,000 95, 000 To finance the construction cost, Blackstone borrowed $4,100,000 on March 1, 2021. The loan is payable in 10 annual installments of $410,000 plus interest at the rate of 12%. Blackstone's average amounts of accumulated building construction expenditures were as follows: For the period March 1 to December 31, 2021 For the period January 1 to September 30, 2022 $1,010,000 2,850, 000 Required: 1. Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022. 2. Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a bullding for $710,000. Additionally.
Blackstone paid a real estate broker's commission of $47,000, legal fees of $6,500, and title insurance of $23,500. The closing
statement indicated that the land value was $555,000 and the building value was $155,000. Shortly after acquisition, the building was
razed at a cost of $86,000.
Blackstone entered into a $4,100,00o0 fixed-price contract with Barnett Builders, Inc., on March 1, 2021, for the construction of an office
building on land site 11. The building was completed and occupied on September 30, 2022. Additional construction costs were
incurred as follows:
Plans, specifications, and blueprints
Architects fees for design and supervision
$23,000
95,000
To finance the construction cost, Blackstone borrowed $4,100,000 on March 1, 2021, The loan is payable in 10 annual installments of
$410,000 plus interest at the rate of 12%. Blackstone's average amounts of accumulated building construction expenditures were as
follows:
For the period March 1 to December 31, 2021
For the period January 1 to September 30, 2022
$1,010,000
2,850, 000
Required:
1. Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of
September 30, 2022.
2. Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30,
2022.
Transcribed Image Text:2022.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as
of September 30, 2022.
BLACKSTONE CORPORATION
Land Account (Site Number 11)
As of September 30, 2022
Balance, September 30, 2022
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