Question
In: Accounting
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
| January 1, 2018 | $ | 1,260,000 | |
| March 1, 2018 | 750,000 | ||
| June 30, 2018 | 310,000 | ||
| October 1, 2018 | 680,000 | ||
| January 31, 2019 | 1,035,000 | ||
| April 30, 2019 | 1,350,000 | ||
| August 31, 2019 | 2,430,000 | ||
On January 1, 2018, the company obtained a $3 million construction
loan with a 11% interest rate. The loan was outstanding all of 2018
and 2019. The company’s other interest-bearing debt included two
long-term notes of $5,700,000 and $7,700,000 with interest rates of
5% and 7%, respectively. Both notes were outstanding during all of
2018 and 2019. Interest is paid annually on all debt. The company’s
fiscal year-end is December 31.
Required:
1. Calculate the amount of interest that Mason
should capitalize in 2018 and 2019 using the weighted-average
method (NOT THE SPECIFIC INTEREST METHOD).
2. What is the total cost of the building?
3. Calculate the amount of interest expense that
will appear in the 2018 and 2019 income statements.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
2,020,000
March 1, 2018
1,740,000
June 30, 2018
1,940,000
October 1, 2018
1,740,000
January 31, 2019
441,000
April 30, 2019
774,000
August 31, 2019
1,071,000
On January 1, 2018, the company obtained a $4,900,000 construction
loan with a 12% interest rate....
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019. Expenditures on
the project were as follows: January 1, 2018 $ 1,710,000 March 1,
2018 1,320,000 June 30, 2018 1,520,000 October 1, 2018 1,320,000
January 31, 2019 378,000 April 30, 2019 711,000 August 31, 2019
1,008,000 On January 1, 2018, the company obtained a $4,200,000
construction loan with a 16% interest rate....
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018,
the Mason Manufacturing Company began construction of a building to
be used as its office headquarters. The building was completed on
September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,180,000
March 1,
2018
660,000
June 30,
2018
860,000
October 1,
2018
660,000
January 31,
2019
279,000
April 30,
2019
612,000
August 31,
2019
909,000
On January 1, 2018, the company obtained a $3,100,000 construction
loan with a 12% interest rate....
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,050,000
March 1, 2018
870,000
June 30, 2018
390,000
October 1, 2018
690,000
January 31, 2019
675,000
April 30, 2019
990,000
August 31, 2019
1,710,000
On January 1, 2018, the company obtained a $3 million construction
loan with a 14% interest...
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,200,000
March 1, 2018
900,000
June 30, 2018
1,100,000
October 1, 2018
900,000
January 31, 2019
315,000
April 30, 2019
648,000
August 31, 2019
945,000
On January 1, 2018, the company obtained a $3,500,000 construction
loan with a 12% interest rate....
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,420,000
March 1, 2018
1,140,000
June 30, 2018
1,340,000
October 1, 2018
1,140,000
January 31, 2019
351,000
April 30, 2019
684,000
August 31, 2019
981,000
On January 1, 2018, the company obtained a $3,900,000
construction loan with a 12% interest rate....
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,070,000
March 1, 2018
840,000
June 30, 2018
380,000
October 1, 2018
710,000
January 31, 2019
1,170,000
April 30, 2019
1,485,000
August 31, 2019
2,700,000
On January 1, 2018, the company obtained a $3 million construction
loan with a 14% interest...
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2019. Expenditures on
the project were as follows: January 1, 2018 $ 1,300,000 March 1,
2018 720,000 June 30, 2018 340,000 October 1, 2018 640,000 January
31, 2019 450,000 April 30, 2019 765,000 August 31, 2019 1,260,000
On January 1, 2018, the company obtained a $3 million construction
loan with a 10% interest...
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018,
the Mason Manufacturing Company began construction of a building to
be used as its office headquarters. The building was completed on
September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,200,000
March 1,
2018
660,000
June 30,
2018
520,000
October 1,
2018
620,000
January 31,
2019
360,000
April 30,
2019
675,000
August 31,
2019
1,080,000
On January 1, 2018, the company obtained a $3 million construction
loan with a 11% interest...
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2018,
the Mason Manufacturing Company began construction of a building to
be used as its office headquarters. The building was completed on
September 30, 2019.
Expenditures on the project were as follows:
January 1, 2018
$
1,940,000
March 1,
2018
1,680,000
June 30,
2018
1,880,000
October 1,
2018
1,680,000
January 31,
2019
432,000
April 30,
2019
765,000
August 31,
2019
1,062,000
On January 1, 2018, the company obtained a $4,800,000 construction
loan with a 14% interest rate....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Assume that attributes with the same name in different relations represent the same domain and that...
- JAVA: Use existing Java Stack class to solve the "Balancing Symbols" problem. The symbols are (),...
- K-NN and Perceptron theory question If we don’t care about the size of the TRAINING SET...
- Make a C program that simulates time-sharing in the operating system. Please follow the instructions provided:...
- What are some current challenges faced by food companies in reducing food waste?
- Arthur buys $2,200.00 worth of stock. Six months later, the value of the stock has risen...
- The Following table is based on a time study for a metal working operation Obs (minutes...
ADVERTISEMENT