PRINTER VERS Problem 10-5 On January 1, 2017, Shamrock Corporation purchased for

Question

PRINTER VERS Problem 10-5 On January 1, 2017, Shamrock Corporation purchased for $720,000 a tract of land Cate number 101) with a building. Shamrock paid a real estate broker's commission of $51,840, legal fees of $8,640, and title guarantee insurance of $25,920. The closing statement indicated that the land value was $720,000 and the building value was $144,000. Shortly after acquisition, the buliding was razed at a cost of $77,760. Shamrock entered into a $4,320,000 fixed-price contract with Slatkin Builders, Inc. on March 1, 2017, for the construction of an office building on land site number 101. The building war completed and occupied on September 30, 2018. Additional construction costs were incurred as follows. Plans, specifications, and blueprints 30,240 118,080 Architects' fees for design and supervision Tie building is estimated to have a 40-year lfe from date of completion and will be depreciated using the 150% dedining-balance method. To finance construction costs, shamrock borrowed $4 320,000 on March 1. 201, The lo s mble in to annual neal e m of luo00t ing-e re-, m r of 10%. Shamrock's weighted-average amounts of accumulated building construction epedtures were as follows. For the period March 1 to December 31, 2017 1,872,000 2,736,000 For the period January 1 to September 30, 2018 Prepare a schedule that discloses the individual costs making up the balance in the land account in e

Explanation / Answer

Cost of land Cost of land and old building $720,000 Real estate broker comission 51840 Leagal fees 8640 Title Insurance 25920 Removal of old building 77760 Cost of Land $884,160 Cost of Building Fixed contruction contract price 4320000 Plans , specifications 30240 Architect fees 118080 Int capitalized during 2017 (1872000*10%) 187200 Int capitalized during 2018 (2736000*10%) 273600 Cost of Building 4929120 If any doubt please comment

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.