Problem NO: 5

On January 1, 2014, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair paid a real estate broker’s comm

On January 1, 2014, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair 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 value was $500,000 and the building value was $100,000. Shortly after acquisition, the building was razed at a cost of $54,000.

\r\n

Blair entered into a $3,000,000 fixed-price contract with Slatkin Builders, Inc. on March 1, 2014, for the construction of an office building on land site number 101. The building was completed and occupied on

\r\n

September 30, 2015. Additional construction costs were incurred as follows.

\r\n

Plans, specifi cations, and blueprints $21,000

\r\n

Architects’ fees for design and supervision 82,000

\r\n

The building is estimated to have a 40-year life from date of completion and will be depreciated using the 150% declining-balance method.

\r\n

To finance construction costs, Blair borrowed $3,000,000 on March 1, 2014. The loan is payable in 10 annual installments of $300,000 starting on March 1, 2015, plus interest at the rate of 10%. Blair’s weighted-average amounts of accumulated building construction expenditures were as follows.

\r\n

For the period March 1 to December 31, 2014 $1,300,000

\r\n

For the period January 1 to September 30, 2015 1,900,000

\r\n

Instructions

\r\n

(a) Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site number 101 as of September 30, 2015.

\r\n

(b) Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2015 Show supporting computations in good form.

0  reviews

Suggestions based on the Question and Answer that you are currently viewing

Snider Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its shareholders at the end of the first

Snider Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its shareholders at the end of the first quarter of the 2014–2015 fiscal year. Snider’s financial accounting department has compiled the following summarized revenue and expense data for the first quarter of the year. Sales revenue $60,000,000 Cost of goods sold 36,000,000 Variable selling expenses 1,000,000 Fixed selling expenses 3,000,000 Included in the fixed selling expenses was the single lump-sum payment of $2,000,000 for television advertisements for the entire year. Instructions (a) Snider Corporation must issue its quarterly financial statements in accordance with IFRS regarding interim financial reporting. (1) Explain whether Snider should report its operating results for the quarter as if the quarter were a separate reporting period in and of itself, or as if the quarter were an integral part of the annual reporting period. (2) State how the sales revenue, cost of goods sold, and fixed selling expenses would be reflected in Snider Corporation’s quarterly report prepared for the first quarter of the 2014–2015 fiscal year. Briefly justify your presentation. (b) What financial information, as a minimum, must Snider Corporation disclose to its shareholders in its quarterly reports?

(0)

The benefits of buying with AnswerDone:

Guaranteed quality through customer reviews

Access to High-Quality Documents

Our platform features a wide range of meticulously curated documents, from solved assignments and research papers to detailed study guides. Each document is reviewed to ensure it meets our high standards, giving you access to reliable and high-quality resources.

Quick and easy check-out

Easy and Secure Transactions

We prioritize your security. Our platform uses advanced encryption technology to protect your personal and financial information. Buying with AnswerDone means you can make transactions with confidence, knowing that your data is secure

Focus on what matters

Instant Access

Once you make a purchase, you’ll have immediate access to your documents. No waiting periods or delays—just instant delivery of the resources you need to succeed.

$1.49  0x  sold
    (0)
  Add to cart