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Question 9 --/1 View Policies Current Attempt in Progress On January 1, 2020, Blue Corporation purchased for $620,000 a tractPrepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site numbPrepare a schedule that discloses the individual costs that should be capitalized in the office building account as of Septem

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Answer #1
1 Cost of Land
$
Acquisition cost 620000
Broker's commission 44640
Legal fees 7440
Title insurance 22320
Building razing cost 66960
Total 761360
2 Cost of Building
$
Fixed-price contract 3720000
Plans, specifications, and blueprints 26040
Architects’ fees 101680
Interst capitalized in 2018 (Note:1) 134333
Interst capitalized in 2019 (Note:1) 176700
Total 4158753
Note:1
Interest to be capitalized=Accumulated building construction contract*Interest rate of loan taken for construction
2018 Interest to be capitalized=1612000*10%*10/12=$134333 (For 10 months-Mar to Dec)
2019 Interest to be capitalized=2356000*10%*9/12=$ 176700 (For 9 months-Jan to Sep)
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