HELP, THANK YOU:)

Comprehensive On January 2, 2019, Brock Corporation purchased a tract of land (site number 101) with a building for $600,000. Additionally, Brock paid a real estate broker's commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing statement indicated that the land's value was $500,000 and the building's value was $100,000. Shortly after acquisition, the building was razed at a cost of $75,000. Brock entered into a $3,000,000 fixed-price contract with Barnett Builders, Inc., on March 2, 2019, for the construction of an office building on land site number 101. The building was completed and occupied on September 30, 2020. Additional construction costs were incurred as follows: Plans, specifications, and blueprints $12,000 Architects' fees for design and supervision 95,000 The company estimates that the building will have a 40-year life from the date of completion and decides to use the 150%-declining-balance depreciation method. To finance the construction cost, Brock borrowed $3,000,000 on March 2, 2019. The loan is payable in 10 annual installments of $300,000 plus interest at the rate of 14%. Brock's weighted average accumulated expenditures related to the construction of the building were as follows: For the period March 2 to December 31, 2019 $ 900,000 For the period January 1 to September 30, 2020 2,300,000 Required: 1. Prepare a schedule that discloses the individual costs making up the balance in the Land account with respect to land site number 101 as of September 30, 2020. 1. Prepare a schedule that discloses the Individual costs making up the balance in the Land account with respect to land site number 101 as of September 30, 2020. BROCK CORPORATION Land Account (Site Number 101) As of September 30, 2020 Acquisition cost $ 600,000 Real estate broker's commission 36,000 Legal fees 6,000 Title guarantee insurance - 18,000 Cost of razing existing building 75,000 Balance, September 30, 2020 735,000 Feedback Check My Work The acquisition cost of property, plant, and equipment includes all costs necessary to obtain the benefits to be derived from the asset. Specifically, you should capitalize or record as part of the cost of the asset any expenditure necessary to obtain the asset and put it in operating condition. The recorded cost of land includes the following costs: contract price costs of closing the transaction and obtaining title, including commissions, options, legal fees, title search, insurance, and past due taxes costs of surveys costs of preparing the land for its particular use, such as clearing, grading, and removing old buildings (net of any proceeds from salvage) when such improvements have an indefinite life government assessments for streets, sidewalks, sewers and water lines for which the government is responsible for the upkeep and are permanent in nature 2. Prepare a schedule that discloses the individual costs that the company should capitalize in the Office Building account as of September 30, 2020. BROCK CORPORATION Capitalized Cost of Office Building As of September 30, 2020 Contract cost $ 3,100,000 Plan, specifications, and blueprints 12,000 Architects' fees for design and supervision 95,000 Capitalized interest--2019 350,000 Capitalized Interest--2020 283.500 X Total capitalized cost, September 30, 2020 $ 3,740,500 X Feedback Check My Work The acquisition cost of property, plant, and equipment includes all costs necessary to obtain the benefits to be derived from the asset. Specifically, you should capitalize or record as part of the cost of the asset any expenditure necessary to obtain the asset and put it in operating condition. The recorded cost of buildings includes the following costs: contract price contract price costs of excavation for the specific building architectural costs and the costs of building permits capitalized interest costs To determine the amount of interest that should be capitalized, a company should follow these four steps: Step 1: Determine the weighted average accumulated expenditures for the period. Weighted average accumulated expenditures are defined as the sum of the construction expenditures weighted by the amount of time that interest cost could have been incurred on those expenditures during the construction period. Step 2:Determine the appropriate interest rate. The selection of an interest rate is based on the relationship between the weighted average accumulated expenditures and the amounts borrowed specifically for construction. specifically for construction. . If the weighted average accumulated expenditures are less than or equal to the funds borrowed specifically to finance the construction of a qualifying asset, the company uses the interest rate on that specific borrowing, If the weighted average expenditures on the asset are greater than the specific borrowing or if no specific borrowing is made, the company uses both the interest rate on the specific borrowing and a weighted average interest rate on all other borrowings. Step 3:Compute avoidable interest by applying the appropriate interest rate(s) to the weighted average accumulated expenditures. Step 4:Capitalize the lesser of avoidable interest or actual interest. The total amount of interest cost that a company capitalizes each period may not exceed the actual interest cost incurred. 3. Prepare a schedule showing the depreciation expense computation of the office building for the year ended December 31, 2020. Round your rate to two decimal places. Round your answers to the nearest dollar. BROCK CORPORATION Computation of Depreciation of Office Building Using 150% Declining Balance Method For the Year Ended December 31, 2020 Capitalized cost 350,000 150% declining balance rate 28.3,500X Annual depreciation $ 35,067 X Depreciation October 1 to December 31, 2020 3.75 X Feedback Feedback Check My Work Partially correct