X Calibri (Body) v 11 ' ' OD C Paste BIU v a Av 042 H B D G 1 Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation 2 purchased for $950,000 atract of land (site number 101) with a building Blair paid a real estate 3 broker's commission of $42 000 legal fees of $3 700 and title guarantee insurance 4 of $4,300 The closing statement indicated that the land value was 5 $800,000 and the building value was $200,000 Shortly after acquisition, the building was 6 razed at a cost of $30,000 7 Blair entered into a contract with Slatkin Builders, Inc on March 1, 2021, for the construction of an office 8 building on land site number 101 The building was completed and occupied on Dec 31, 2021 Additional 9 construction costs were incumed as follows 10 To finance construction costs, Blair borrowed $1,000,000 on March 1, 2021 The loan 11 is payable in 10 years in a single sum of $1,000,000 plus annual interest at 12 9 which will be paid at March 1 13 Other debt includes a 20 year notes payable of $2 000 000 issued on January 1,2010, with 14 an annula interest at 12 15 Blair's building construction expenditures were as follows 16 17 March 1, 2021 Plans and architects fees $600,000 18 May 1, 2021 Construction cost $1 200 000 19 Oct 1, 2021 Construction cost $300 000 20 Dec 31, 2021 Construction cost $500,000 21 22 23 Instructions 24 (a) Prepare a schedule that discloses the individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021 26 27 BLAIR CORPORATION 28 Cost of Land (Site 101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 33 4,300 insurance 34 Removal of old bulding 35 200,000 Cost of land 30,000 36 $1 230 000 37 22 23 Instructions 24 (a) Prepare a schedule that discloses the Individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021 26 27 BLAIR CORPORATION 28 Cost of Land (Site 101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 4,300 33 insurance 34 Removal of old bulding 200,000 35 Cost of land 30,000 36 $1,230,000 37 38 (6) Prepare a schedule that discloses the individual costs that should be capitalized in the office 39 bullding account as of Dec 31, 2021 Show supporting computations in good form 40 41 Actual interest 42 Mar 21 $600,000 10 $60,000 21 Mar 21 May $1 200 000 10 $120,000 21 May 44 21 Oct $300,000 10 $30,000 21 Oct 45 31 Dec $500 000 10 $50,000 31 Dec 46 47 $600,000 $1,200,000 $300,000 $500,000 10 10 10 10 50 51 BLAIR CORPORATION Cost of Building As of Dec 31, 2021 52 Construction cost 53 Interest capitakzed during 2021 55 Coot of building 56 57 58 G H A B D E F 1 Q2 Mathews Company exchanged equipment used in its manufacturing operations 2 plus $6,500 in cash for similar equipment used in the 3 operations of Biggio Company The following information pertains to the exchange 4 Mathews Co Biggio Co 5 6 Equipment (cost) $153,000 $146,000 7 Accumulated depreciation $31,000 $18,500 8 Fair value of equipment $125,500 $132,000 9 Cash given up $6,500 10 11 Instructions 12 (a) Prepare the joumal entries to record the exchange on the books of both companies 13 Assume that the exchange lacks commercial substance 14 Mathewes 15 Book Value Fair Value Gain (LOSS) 16 17 18 19 20 21 22 23 24 Baiggio 25 Book Value Fair Value 26 27 28 29 30 31 32 33 34 Gain (Loss) 32 33 34 35 (b) Prepare the joumal entries to record the exchange on the books of both companies 36 Assume that the exchange has commercial substance 37 38 Book Value Fair Value Gain (Loss) 39 40 41 42 43 44 45 46 47 Baiggio 48 Book Value Fair Value Gain (Loss) 49 50 51 52 53 54 55 56 57 58 59 X Calibri (Body) v 11 ' ' OD C Paste BIU v a Av 042 H B D G 1 Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation 2 purchased for $950,000 atract of land (site number 101) with a building Blair paid a real estate 3 broker's commission of $42 000 legal fees of $3 700 and title guarantee insurance 4 of $4,300 The closing statement indicated that the land value was 5 $800,000 and the building value was $200,000 Shortly after acquisition, the building was 6 razed at a cost of $30,000 7 Blair entered into a contract with Slatkin Builders, Inc on March 1, 2021, for the construction of an office 8 building on land site number 101 The building was completed and occupied on Dec 31, 2021 Additional 9 construction costs were incumed as follows 10 To finance construction costs, Blair borrowed $1,000,000 on March 1, 2021 The loan 11 is payable in 10 years in a single sum of $1,000,000 plus annual interest at 12 9 which will be paid at March 1 13 Other debt includes a 20 year notes payable of $2 000 000 issued on January 1,2010, with 14 an annula interest at 12 15 Blair's building construction expenditures were as follows 16 17 March 1, 2021 Plans and architects fees $600,000 18 May 1, 2021 Construction cost $1 200 000 19 Oct 1, 2021 Construction cost $300 000 20 Dec 31, 2021 Construction cost $500,000 21 22 23 Instructions 24 (a) Prepare a schedule that discloses the individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021 26 27 BLAIR CORPORATION 28 Cost of Land (Site 101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 33 4,300 insurance 34 Removal of old bulding 35 200,000 Cost of land 30,000 36 $1 230 000 37 22 23 Instructions 24 (a) Prepare a schedule that discloses the Individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021 26 27 BLAIR CORPORATION 28 Cost of Land (Site 101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 4,300 33 insurance 34 Removal of old bulding 200,000 35 Cost of land 30,000 36 $1,230,000 37 38 (6) Prepare a schedule that discloses the individual costs that should be capitalized in the office 39 bullding account as of Dec 31, 2021 Show supporting computations in good form 40 41 Actual interest 42 Mar 21 $600,000 10 $60,000 21 Mar 21 May $1 200 000 10 $120,000 21 May 44 21 Oct $300,000 10 $30,000 21 Oct 45 31 Dec $500 000 10 $50,000 31 Dec 46 47 $600,000 $1,200,000 $300,000 $500,000 10 10 10 10 50 51 BLAIR CORPORATION Cost of Building As of Dec 31, 2021 52 Construction cost 53 Interest capitakzed during 2021 55 Coot of building 56 57 58 G H A B D E F 1 Q2 Mathews Company exchanged equipment used in its manufacturing operations 2 plus $6,500 in cash for similar equipment used in the 3 operations of Biggio Company The following information pertains to the exchange 4 Mathews Co Biggio Co 5 6 Equipment (cost) $153,000 $146,000 7 Accumulated depreciation $31,000 $18,500 8 Fair value of equipment $125,500 $132,000 9 Cash given up $6,500 10 11 Instructions 12 (a) Prepare the joumal entries to record the exchange on the books of both companies 13 Assume that the exchange lacks commercial substance 14 Mathewes 15 Book Value Fair Value Gain (LOSS) 16 17 18 19 20 21 22 23 24 Baiggio 25 Book Value Fair Value 26 27 28 29 30 31 32 33 34 Gain (Loss) 32 33 34 35 (b) Prepare the joumal entries to record the exchange on the books of both companies 36 Assume that the exchange has commercial substance 37 38 Book Value Fair Value Gain (Loss) 39 40 41 42 43 44 45 46 47 Baiggio 48 Book Value Fair Value Gain (Loss) 49 50 51 52 53 54 55 56 57 58 59

Question

X Calibri (Body) v 11 ' ' OD C Paste BIU v a  Av 042 H B D G 1 Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation 2 purchased for $950,000 atract of land (site number 101) with a building  Blair paid a real estate 3 broker's commission of $42 000 legal fees of $3 700 and title guarantee insurance 4 of $4,300 The closing statement indicated that the land value was 5 $800,000 and the building value was $200,000 Shortly after acquisition, the building was 6 razed at a cost of $30,000 7 Blair entered into a contract with Slatkin Builders, Inc  on March 1, 2021, for the construction of an office 8 building on land site number 101  The building was completed and occupied on Dec 31, 2021  Additional 9 construction costs were incumed as follows  10 To finance construction costs, Blair borrowed $1,000,000 on March 1, 2021  The loan 11 is payable in 10 years in a single sum of $1,000,000 plus annual interest at 12 9  which will be paid at March 1  13 Other debt includes a 20 year notes payable of $2 000 000 issued on January 1,2010, with 14 an annula interest at 12  15 Blair's building construction expenditures were as follows  16 17 March 1, 2021  Plans and architects fees $600,000 18 May 1, 2021  Construction cost $1 200 000 19 Oct 1, 2021  Construction cost $300 000 20 Dec 31, 2021  Construction cost $500,000 21 22 23 Instructions  24 (a) Prepare a schedule that discloses the individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021  26 27 BLAIR CORPORATION 28 Cost of Land (Site  101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 33 4,300 insurance 34 Removal of old bulding 35 200,000 Cost of land 30,000 36 $1 230 000 37 22 23 Instructions  24 (a) Prepare a schedule that discloses the Individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021  26 27 BLAIR CORPORATION 28 Cost of Land (Site  101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 4,300 33 insurance 34 Removal of old bulding 200,000 35 Cost of land 30,000 36 $1,230,000 37 38 (6) Prepare a schedule that discloses the individual costs that should be capitalized in the office 39 bullding account as of Dec 31, 2021  Show supporting computations in good form  40 41 Actual interest 42 Mar 21 $600,000 10  $60,000 21 Mar 21 May $1 200 000 10  $120,000 21 May 44 21 Oct $300,000 10  $30,000 21 Oct 45 31 Dec $500 000 10  $50,000 31 Dec 46 47 $600,000 $1,200,000 $300,000 $500,000 10  10  10  10  50 51 BLAIR CORPORATION Cost of Building As of Dec 31, 2021 52 Construction cost 53 Interest capitakzed during 2021 55 Coot of building 56 57 58 G H A B D E F 1 Q2 Mathews Company exchanged equipment used in its manufacturing operations 2 plus $6,500 in cash for similar equipment used in the 3 operations of Biggio Company  The following information pertains to the exchange  4 Mathews Co  Biggio Co  5 6 Equipment (cost) $153,000 $146,000 7 Accumulated depreciation $31,000 $18,500 8 Fair value of equipment $125,500 $132,000 9 Cash given up $6,500 10 11 Instructions 12 (a) Prepare the joumal entries to record the exchange on the books of both companies  13 Assume that the exchange lacks commercial substance  14 Mathewes 15 Book Value Fair Value Gain (LOSS) 16 17 18 19 20 21 22 23 24 Baiggio 25 Book Value Fair Value 26 27 28 29 30 31 32 33 34 Gain (Loss) 32 33 34 35 (b) Prepare the joumal entries to record the exchange on the books of both companies  36 Assume that the exchange has commercial substance  37 38 Book Value Fair Value Gain (Loss) 39 40 41 42 43 44 45 46 47 Baiggio 48 Book Value Fair Value Gain (Loss) 49 50 51 52 53 54 55 56 57 58 59 X Calibri (Body) v 11 ' ' OD C Paste BIU v a  Av 042 H B D G 1 Q1 (Classification of Costs and Interest Capitalization) On January 1, 2021, Blair Corporation 2 purchased for $950,000 atract of land (site number 101) with a building  Blair paid a real estate 3 broker's commission of $42 000 legal fees of $3 700 and title guarantee insurance 4 of $4,300 The closing statement indicated that the land value was 5 $800,000 and the building value was $200,000 Shortly after acquisition, the building was 6 razed at a cost of $30,000 7 Blair entered into a contract with Slatkin Builders, Inc  on March 1, 2021, for the construction of an office 8 building on land site number 101  The building was completed and occupied on Dec 31, 2021  Additional 9 construction costs were incumed as follows  10 To finance construction costs, Blair borrowed $1,000,000 on March 1, 2021  The loan 11 is payable in 10 years in a single sum of $1,000,000 plus annual interest at 12 9  which will be paid at March 1  13 Other debt includes a 20 year notes payable of $2 000 000 issued on January 1,2010, with 14 an annula interest at 12  15 Blair's building construction expenditures were as follows  16 17 March 1, 2021  Plans and architects fees $600,000 18 May 1, 2021  Construction cost $1 200 000 19 Oct 1, 2021  Construction cost $300 000 20 Dec 31, 2021  Construction cost $500,000 21 22 23 Instructions  24 (a) Prepare a schedule that discloses the individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021  26 27 BLAIR CORPORATION 28 Cost of Land (Site  101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 33 4,300 insurance 34 Removal of old bulding 35 200,000 Cost of land 30,000 36 $1 230 000 37 22 23 Instructions  24 (a) Prepare a schedule that discloses the Individual costs making up the balance in the land account in 25 respect of land site number 101 as of Dec 31, 2021  26 27 BLAIR CORPORATION 28 Cost of Land (Site  101) 29 As of Dec 31, 2021 30 Cost of Land with bulding $950,000 31 Real state broker commission 42,000 32 Legal fees 3,700 Title 4,300 33 insurance 34 Removal of old bulding 200,000 35 Cost of land 30,000 36 $1,230,000 37 38 (6) Prepare a schedule that discloses the individual costs that should be capitalized in the office 39 bullding account as of Dec 31, 2021  Show supporting computations in good form  40 41 Actual interest 42 Mar 21 $600,000 10  $60,000 21 Mar 21 May $1 200 000 10  $120,000 21 May 44 21 Oct $300,000 10  $30,000 21 Oct 45 31 Dec $500 000 10  $50,000 31 Dec 46 47 $600,000 $1,200,000 $300,000 $500,000 10  10  10  10  50 51 BLAIR CORPORATION Cost of Building As of Dec 31, 2021 52 Construction cost 53 Interest capitakzed during 2021 55 Coot of building 56 57 58 G H A B D E F 1 Q2 Mathews Company exchanged equipment used in its manufacturing operations 2 plus $6,500 in cash for similar equipment used in the 3 operations of Biggio Company  The following information pertains to the exchange  4 Mathews Co  Biggio Co  5 6 Equipment (cost) $153,000 $146,000 7 Accumulated depreciation $31,000 $18,500 8 Fair value of equipment $125,500 $132,000 9 Cash given up $6,500 10 11 Instructions 12 (a) Prepare the joumal entries to record the exchange on the books of both companies  13 Assume that the exchange lacks commercial substance  14 Mathewes 15 Book Value Fair Value Gain (LOSS) 16 17 18 19 20 21 22 23 24 Baiggio 25 Book Value Fair Value 26 27 28 29 30 31 32 33 34 Gain (Loss) 32 33 34 35 (b) Prepare the joumal entries to record the exchange on the books of both companies  36 Assume that the exchange has commercial substance  37 38 Book Value Fair Value Gain (Loss) 39 40 41 42 43 44 45 46 47 Baiggio 48 Book Value Fair Value Gain (Loss) 49 50 51 52 53 54 55 56 57 58 59

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