Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation purchased for $820,000 |a tract of land (site number 101) with a building. Blair paid a real estate broker's commission of of $800,000 and the building value was $200,000 razed at a cost of Blair entered into a contract with Slatkin Builders, Inc. on March 1, 2021, for the construction of an foffice building on land site number 101. The buiklding was completed and occupied on Dec 31, 2021. Additional construction costs were incurred as follows: To finance construction costs, Blair borrowed is payable in 12% Other debt includes a 20-year notes payable of an annula interest at Blair's building construction expenditures were as follows: $5,100 , and title guarantee insurance $32,000 The closing statement indicated that the land value was , legal fees of $3,300 Shortly after acquisition, the building was $39,600 $1,000,000 on March 1, 2021. The loan years in a single sum of $1,000,000 ]plus annual interest at 10 ,which will be paid at March 1. $2,000,000 issued on January 1,2010, with 14% March 1, 2021: Plans and architects fees May 1, 2021: Construction cost Oct 1, 2021: Construction cost Dec 31, 2021: Construction cost $650,000 $1,250,000 $350,000 $550,000
Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation purchased for $820,000 |a tract of land (site number 101) with a building. Blair paid a real estate broker's commission of of $800,000 and the building value was $200,000 razed at a cost of Blair entered into a contract with Slatkin Builders, Inc. on March 1, 2021, for the construction of an foffice building on land site number 101. The buiklding was completed and occupied on Dec 31, 2021. Additional construction costs were incurred as follows: To finance construction costs, Blair borrowed is payable in 12% Other debt includes a 20-year notes payable of an annula interest at Blair's building construction expenditures were as follows: $5,100 , and title guarantee insurance $32,000 The closing statement indicated that the land value was , legal fees of $3,300 Shortly after acquisition, the building was $39,600 $1,000,000 on March 1, 2021. The loan years in a single sum of $1,000,000 ]plus annual interest at 10 ,which will be paid at March 1. $2,000,000 issued on January 1,2010, with 14% March 1, 2021: Plans and architects fees May 1, 2021: Construction cost Oct 1, 2021: Construction cost Dec 31, 2021: Construction cost $650,000 $1,250,000 $350,000 $550,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(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 Dec 31, 2021.
BLAIR CORPORATION
Cost of Land (Site #101)
As of Dec 31, 2021
Cost of land
(b) Prepare a schedule that discloses the individual costs that should be capitalized in the office
building account as of Dec 31, 2021. Show supporting computations in good form.
BLAIR CORPORATION
Cost of Building
As of Dec 31, 2021
Construction cost
Interest capitalized during 2021
Cost of building
Transcribed Image Text:Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation
purchased for $820,000 a tract of land (site number 101) with a building. Blair paid a real estate
broker's commission of
of
$800,000 and the building value was $200,000
razed at a cost of
Blair entered into a contract with Slatkin Builders, Inc. on March 1, 2021, for the construction of an
office building on land site number 101. The building was completed and occupied on Dec 31, 2021.
Additional construction costs were incurred as follows:
To finance construction costs, Blair borrowed
is payable in
12%
Other debt includes a 20-year notes payable of
an annula interest at
Blair's building construction expenditures were as follows:
$5,100, and title guarantee insurance
$32,000
The closing statement indicated that the land value was
, legal fees of
$3,300
. Shortly after acquisition, the building was
$39,600
$1,000,000 on March 1, 2021. The loan
years in a single sum of $1,000,000 plus annual interest at
10
,which will be paid at March 1.
$2,000,000 issued on January 1,2010, with
14%
March 1, 2021: Plans and architects fees
May 1, 2021: Construction cost
Oct 1, 2021: Construction cost
Dec 31, 2021: Construction cost
$650,000
$1,250,000
$350,000
$550,000
Instructions:
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