Question

On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with...

On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a building for $740,000. Additionally, Blackstone paid a real estate broker's commission of $50,000, legal fees of $8,000, and title insurance of $25,000. The closing statement indicated that the land value was $570,000 and the building value was $170,000. Shortly after acquisition, the building was razed at a cost of $89,000.

Blackstone entered into a $4,400,000 fixed-price contract with Barnett Builders, Inc., on March 1, 2021, for the construction of an office building on land site 11. The building was completed and occupied on September 30, 2022. Additional construction costs were incurred as follows:

Plans, specifications, and blueprints $ 26,000
Architects' fees for design and supervision 98,000


To finance the construction cost, Blackstone borrowed $4,400,000 on March 1, 2021. The loan is payable in 10 annual installments of $440,000 plus interest at the rate of 12%. Blackstone's average amounts of accumulated building construction expenditures were as follows:

For the period March 1 to December 31, 2021 $ 1,040,000
For the period January 1 to September 30, 2022 3,000,000


Required:

Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022.

BLACKSTONE CORPORATION
Land Account (Site Number 11)
As of September 30, 2022
Balance, September 30, 2022
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Answer #1

BLACKSTONE CORPORATION Land Account (Site Number 11) As of September 30, 2022 Acquisition cost $740,000 Real estate brokers

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