On June $28,2023,$ in relocating to a new town, Novak Corp. purchased a property consisting of two hectares of land and an unused

building for $$225,000$ plus property taxes in arrears of $$4,040.$ The company paid a real estate broker a fee of $$11,960$ for finding the

property and legal fees on the purchase transaction of $$5,840.$ The closing statement indicated that the assessed values for property

tax purposes were $$174,780$ for the land and $$34,670$ for the building. Shortly after acquisition, the building was demolished at a cost

of $$23,930.$

Novak then entered into a $$1,300,400$ fixed$-$price contract with Maliseet Builders Inc. on August $1,2023,$ for the construction of an

office building on this site. The building was completed and occupied on April $29,2024,$ as was a separate maintenance building that

was constructed by Novak's employees. Additional costs related to the property included:Advertisements in newspaper and on television announcing opening of the building

$10,200$

Gala opening party for customers, suppliers, and friends of Novak

$18,400$

Costs of internal direct labour and materials for maintenance building

$66,600$

Allocated variable plant overhead based on direct labour hours worked on maintenance building

$9,600$

Allocated cost of executive time spent on project

$53,600$

Interest costs on debt incurred to pay contractor's progress billings up to building completion

$62,800$

Interest costs on short$-$term loan to finance maintenance building costs

$3,200$

As an incentive for Novak to locate and build in the town, the municipality agreed not to charge its normal building permit fees of

$$35,800.$ This amount was included in the $$1,300,400$ contract fee. Novak uses the cost reduction method for any government grants,

such as the waiving of these permit fees. The contract amount of $$1,300,400$ was reduced by this grant. The building and the

maintenance building are estimated to have a $40-$year life from their dates of completion and will be depreciated using the straight$-$

line method with no residual value.

Novak is a private company with an April $30$ year end, and the company accountant is currently analyzing the new Buildings account

that was set up to capture all the expenditures and credits explained above that relate to the property.

$($a$1)$

Compute the costs that would be capitalized and included in the new Buildings account on the April $30,2024$ statement of

financial position, assuming the accountant wants to comply with ASPE but tends to be very conservative in nature; in othersuch as the waiving of these permit fees. The contract amount of $$1,300,400$ was reduced by this grant. The building and the

maintenance building are estimated to have a $40-$year life from their dates of completion and will be depreciated using the straight$-$

line method with no residual value.

Novak is a private company with an April $30$ year end, and the company accountant is currently analyzing the new Buildings account

that was set up to capture all the expenditures and credits explained above that relate to the property.

$($a$1)$

Compute the costs that would be capitalized and included in the new Buildings account on the April $30,2024$ statement of

financial position, assuming the accountant wants to comply with ASPE but tends to be very conservative in nature; in other

words, she does not want to overstate income or assets assuming the fixed fee contract is reduced by municipal government grant

amount.

Cost of building