On June 28, 2020, in relocating to a new town, Pronghorn Corp, purchased a property consisting of two hectares of land and an unused building for $224,830 plus property taxes in arrears of $4,050. The company paid a real estate broker a fee of $11,640 for finding the property and legal fees on the purchase transaction of $5,510. The closing statement indicated that the assessed values for property tax purposes were $174,760 for the land and $34,960 for the building. Shortly after acquisition the building was demolished at a cost of $23,510. Pronghorn Corp. then entered into a $1,300,200 fixed-price contract with Maliseet Builders Inc. on August 1, 2020, for the construction of an office building on this site. The building was completed and occupied on April 29, 2021, as was a separate maintenance building that was constructed by Pronghorn's employees. Additional costs related to the property included: Plans, specifications, and blueprints $25,400 Architects' fees for design and supervision 82,200 Landscaping 42,000 Extras on contract for upgrading of windows 46,000 External signage on the property 23,400 Advertisements in newspaper and on television announcing opening of the building 10,400 Gala opening party for customers, suppliers, and friends of Pronghorn 18.800 Costs of internal direct labour and materials for maintenance building 66,800 Allocated variable plant overhead based on direct labour hours worked on maintenance building 9,600 External signage on the property 23,400 Advertisements in newspaper and on television announcing opening of the building 10,400 Gala opening party for customers, suppliers, and friends of Pronghorn 18,800 Costs of internal direct labour and materials for maintenance building 66,800 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 62,600 Interest costs on short-term loan to finance maintenance building costs 2,800 As an incentive for Pronghorn to locate and build in the town, the municipality agreed not to charge its normal building permit fees of $36,000. This amount was included in the $1.300.200 contract fee. Pronghorn uses the cost reduction method for any government grants, such as the waiving of these permit fees. The contract amount of $1,300,200 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. Pronghorn 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 Part 1 X Your answer is incorrect. Compute the costs that would be capitalized and included in the new Buildings account on the April 30, 2021 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 $ 1496200 Instructions a. Prepare a schedule that identifies the costs that would be capitalized and included in the new Buildings account on the April 30, 2021 statement of financial position, assuming the accontant 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. Briefly justify your calculations. How would your answer change if Kerr were to comply with IFRS? b. Prepare a schedule that identifies the costs that would be capitalized and included in the new Buildings account on the April 30, 2021 statement of financial position, assuming the accountant wants to comply with ASPE, but is aware that Kerr needs to report increased income to support a requested increase in its bank loan next month. Briefly justify your calculations. c. Comment on the difference in results for parts (a) and (b). Calculate the total expenses related to the building under both scenarios. What else should be considered in determining the amount to be capitalized