On January 1, 2017, Blair Corporation
purchased for	$680,000	a tract of land (site number 101) with a building. Blair paid a real estate
broker’s commission of		$54,000	, legal fees of	$9,200	, and title guarantee insurance
of	$17,000	. The closing statement indicated that the land value was
$500,000	and the building value was		$100,000	. Shortly after acquisition, the building was
razed at a cost of		$84,000
Blair entered into a contract with Slatkin Builders, Inc. on March 1, 2017, for the construction of an office building on land site number 101. The building was completed and occupied on September 30, 2018. Additional construction costs were incurred as follows:
							The building is estimated to have a			40	year life from date of completion and will be
							depreciated using the		150%	declining balance method.
To finance construction costs, Blair borrowed				$5,000,000	on March 1, 2017. The loan
is payable in	10	years in a single sum of		$5,000,000	plus annual interest at
10%	, which will be paid at March 1.
Blair's building construction expenditures were as follows:
	March 1, 2017: Plans and architects fees				$800,000
	May 1, 2017: Construction cost				$1,100,000
	Oct 1, 2017: Construction cost				$1,500,000
	Dec 31, 2017: Construction cost				$1,000,000
	Apr 1, 2018: Construction cost				$1,200,000
	Aug 1, 2018: Construction cost				$300,000
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, 2018.
	BLAIR CORPORATION
	Cost of Land (Site #101)
	As of September 30, 2018
	Cost of land
(b) Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2018. Show supporting computations in good form.
2017			exp	factor	weighted exp
Total
Avoidable interest:
Actual interest:
capitalized interest:
2018			exp	factor	weighted exp
Total
Avoidable interest:
Actual interest:
Interest to be capitalized:
BLAIR CORPORATION
Cost of Building
As of September 30, 2018
Construction cost
Interest capitalized during 2017
Interest capitalized during 2018
Cost of building

Answer rating: 100% (QA)

ans a Cost of Land Cost of land and Old Building 680000 Real estate Broker coommission 54000 Lega fe... View the full answer