P10-5 (LO1,2) Classification of Costs and Interest Capitalization During January, Blair Corporation incurred transactions provided below: (a) BLAIR CORPORATION Cost of Land (Site #101) As of September 30, 2021 2$ Purchase of a tract of land (site number 101) with a building on January 1, 2020 Payment of real estate broker's commission Legal fees Title guarantee insurance Land value indicated on the closing statement Building value indicated on the closing statement Cost to raze the building shortly after acquisition 500,000 36,000 6,000 18,000 500,000 100.000 54,000 Entered into a fixed-price contract with Slatkin Builders, Inc. on March 1, 2020, for the construction of an office building on land site number 101. The building was completed and occupied on September 30, 2021. (b) Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2021, $ 3,000,000 Additional construction costs were incurred as follows: Calculation of capitalized interest: Plans, specifications, and blueprints Architects' fees for design and supervision 21,000 82,000 Interest to be capitalized: 2020 2021 Estimated useful life of the building from date of completion Depreciation method used for building 40 years 150% declining balance Actual interest: 2020 $ 3,000,000 Borrowing to finance construction costs on March 1, 2020 Payment terms on loan 2021 Number of installment payments Amount of each annual installment, plus interest, starting March 1, 2021 10 $ 300,000 Interest rate 10% BLAIR CORPORATION Cost of Building Weighted-average amounts of accumulated building construction expenditures: As of September 30, 2021 $ 1,300,000 For the period March 1 to December 31, 2020 For the period January 1 to September 30, 2021 1,900,000 (AICPA adapted) Instructions: (a) Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site number 101 as of September 30, 2021.