Excell: calculation of actual interest

C 4 5 UNO AWN 1 P10-5 (L01.3) Classification of Costs and Interest Capitalization 2 During January, Blair Corporation incurred transactions provided below: 3 Purchase of a tract of land (site number 101) with a building on January 1, 2017 S 500,000 Payment of real estate broker's commission 36,000 Legal fees 6,000 Title guarantee insurance 18,000 Land value indicated on the closing statement 500,000 Building value indicated on the closing statement 100,000 10 Cost to raze the building shortly after acquisition 54,000 11 12 Entered into a fixed-price contract with Slatkin Builders, Inc. on March 1, 2017, for the construction 13 of an office building on land site number 101. The building was completed and occupied on 14 Sentember 30, 2018 $ 3,000,000 15 Additional construction costs were incurred as follows: 16 Plans, specifications, and blueprints 21,000 17 Architects' foes for design and supervision 82,000 18 19 Estimated useful life of the building from date of completion 40 years 20 Depreciation method used for building 150% declining balance 21 22 Borrowing to finance construction costs on March 1, 2017 S 3,000,000 23 Payment terms on loan: 24 Number of installment payments 10 25 Amount of each annual installment, plus interest, starting March 1, 2018 $ 300,000 26 Interest rate 10% 27 28 Weighted average amounts of accumulated building construction expenditures: For the period March 1 to December 31, 2017 $ 1,300,000 For the period January 1 to September 30, 2018 1,900,000 31 (AICPA adapted) 32 33 Instructions: 34 (a) Prepare a schedule that discloses the individual costs making up the balance in the land account 35 in respect of land site number 101 as of September 30, 2018. 36 37 (a) BLAIR CORPORATION 38 Cost of Land (Site #101) 39 As of September 30, 2018 40 Cost of land and old building S 500,000 41 Real estate broker's commission 36,000 42 Legal fees 6,000 43 Title insurance 18,000 44 Removal of old building 54,000 45 46 47 Cost of land s 614.000 a on AWN O 29 30 A : VOOR 9 (b) Prepare a schedule that discloses the individual costs that should be capitalized in the office 0 building account as of September 30, 2018 2 Calculation of capitalized interest: 4 Interest to be capitalized: 2017 130,000 2018 190,000 Actual interest 2017 2018 BLAIR CORPORATION Cost of Building As of September 30, 2018 Fixed construction contract price Plans, specifications, and blueprints Architects' fees Interest capitalized during 2017 Interest capitalized during 2018 Cost of building 3,000,000 21,000 82,000 130,000 190,000 $ 3,423,000