# On January 2, 2019, Brock Corporation purchased a tract of land (site number 101) with a building for $600,000. Additionally, Brock paid a real estate broker’s commission of$36,000, legal fees of $6,000, and title guarantee insurance of$18,000. The closing statement indicated that the land’s value was $500,000 and the building’s value was$100,000. Shortly after acquisition, the building was razed at a cost of $75,000. Brock entered into a$3,000,000 fixed-price contract with Barnett Builders, Inc., on March 2, 2019, for the construction of an office building on land site number 101. The building was completed and occupied on September 30, 2020. Additional construction costs were incurred as follows: The company estimates that the building will have a 40-year life from the date of completion and decides to use the 150%-declining-balance depreciation method. To finance the construction cost, Brock borrowed $3,000,000 on March 2, 2019. The loan is payable in 10 annual installments of$300,000 plus interest at the rate of 14%. Brock’s weighted average accumulated expenditures related to the construction of the building were as follows: Required: 1. Prepare a schedule that discloses the individual costs making up the balance in the Land account with respect to land site number 101 as of September 30, 2020. 2. Prepare a schedule that discloses the individual costs that the company should capitalize in the Office Building account as of September 30, 2020. Show supporting computations in good form. 3. Prepare a schedule showing the depreciation expense computation of the office building for the year ended December 31, 2020.

BuyFind

### Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

### Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

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Chapter 11, Problem 16P
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