Question
In: Accounting
Ship-Builders Co. began construction of a new cutter for the U.S. Coast Guard on January 1,...
Ship-Builders Co. began construction of a new cutter for the U.S. Coast Guard on January 1, 2018 and completed construction of the ship on March 31, 2019. To help finance construction, Ship-Builders took out an $8,000,000, 2-year, 7% loan on January 1, 2018. Interest on the loan was to be paid annually at the end of each year and the principal at the end. Ship-Builders has no other outstanding interest-bearing debt. Ship-Builders made the following expenditures in conjunction with this construction project:
|
Date |
Amount |
||
|
2/1/2018 |
$ |
1,200,000 |
|
|
3/1/2018 |
650,000 |
||
|
4/1/2018 |
600,000 |
||
|
8/1/2018 |
1,100,000 |
||
|
10/1/2018 |
700,000 |
||
|
11/1/2018 |
800,000 |
||
|
3/1/2019 |
2,500,000 |
||
How much interest should Ship-Builders Co. capitalize in 2018? How much should they expense in 2018?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Use this information for the following two questions. Ship-Builders Co. began construction of a new cutter...
Use this information for the following two questions.
Ship-Builders Co. began construction of a new cutter for the
U.S. Coast Guard on January 1, 2018 and completed construction of
the ship on March 31, 2019. To help finance construction,
Ship-Builders took out an $8,200,000, 2-year, 7% loan on January 1,
2018. Interest on the loan was to be paid annually at the end of
each year and the principal at the end. Ship-Builders has no other
outstanding interest-bearing debt. Ship-Builders...
A Coast Guard Cutter detects an unidentified ship at a distance of 24 km in the...
A
Coast Guard Cutter detects an unidentified ship at a distance of 24
km in the direction 50° east of north. The ship is traveling at 22
km/h on a course at 40° east of North. The Coast Guard wishes to
send a speedboat to intercept and investigate the vessel.
(a) if the speed boat travels at 60 km/h, in what direction
should it head? Express the direction as a compass bearing with
respect to do north.
(b) find the...
On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2021, Dreamworld Co. began construction of a new
warehouse. The building was finished and ready for use on September
30, 2022. Expenditures on the project were as follows:
January 1, 2021
$
326,000
September 1, 2021
$
477,000
December 31, 2021
$
477,000
March 31, 2022
$
477,000
September 30, 2022
$
326,000
Dreamworld had $5,900,000 in 12% bonds outstanding through both
years.
What was the final cost of Dreamworld's warehouse?
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018, Dreamworld Co. began construction of a new
warehouse. The building was finished and ready for use on September
30, 2019. Expenditures on the project were as follows:
January 1, 2018
$
300,000
September 1, 2018
$
450,000
December 31, 2018
$
450,000
March 31, 2019
$
450,000
Dreamworld had the following debt obligations outstanding during
both years:
Construction loan,
10%
$500,000
Long-term note,
12% $2,500,000
Required: What would Dreamworld's capitalized
interest be in 2019 (assuming interest...
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018, Dreamworld Co. began construction of a new
warehouse. The building was finished and ready for use on September
30, 2019. Expenditures on the project were as follows:
January 1, 2018
$
300,000
September 1, 2018
$
450,000
December 31, 2018
$
450,000
March 31, 2019
$
450,000
Dreamworld had the following debt obligations outstanding during
both years:
Construction loan,
10%
$500,000
Long-term note,
12% $2,500,000
Required: What would Dreamworld's capitalized
interest be in 2018?
$50,000
None...
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018, Dreamworld Co. began construction of a new
warehouse. The building was finished and ready for use on September
30, 2019. Expenditures on the project were as follows:
January 1, 2018
$
300,000
September 1, 2018
$
450,000
December 31, 2018
$
450,000
March 31, 2019
$
450,000
Dreamworld had the following debt obligations outstanding during
both years:
Construction loan,
10%
$500,000
Long-term note,
12% $2,500,000
Required: What would Dreamworld's capitalized
interest be in 2019 (assuming interest...
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018,
Dreamworld Co. began construction of a new warehouse. The building
was finished and ready for use on September 30, 2019. Expenditures
on the project were as follows:
January 1, 2018
$
336,000
September 1,
2018
$
504,000
December 31,
2018
$
504,000
March 31,
2019
$
504,000
September 30,
2019
$
336,000
Dreamworld had $6,800,000 in 10% bonds outstanding through both
years.
What was the final cost of Dreamworld's warehouse?
On January 1, 2016, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2016, Dreamworld Co. began construction of
a new warehouse. The building was finished and ready for use on
September 30, 2017. Expenditures on the project were as
follows:
January 1, 2016 $300,000
September 1, 2016 $450,000
December 31, 2016 $450,000
March 31, 2017 $450,000
September 30, 2017 $300,000
Dreamworld had $5,000,000 in 12% bonds outstanding
through both years.
Dreamworld's capitalized interest in 2016
was:
a.
$72,000
b.
$63,000
c.
$54,000
d.
$36,000
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018, Dreamworld Co. began construction of a new
warehouse. The building was finished and ready for use on September
30, 2019. Expenditures on the project were as follows:
January 1, 2018
$
300,000
September 1, 2018
$
450,000
December 31, 2018
$
450,000
March 31, 2019
$
450,000
Dreamworld had the following debt obligations outstanding during
both years:
Construction loan,
10%
$500,000
Long-term note,
12% $2,500,000
Required: What would Dreamworld's capitalized
interest be in 2018?
$45,000
$134,000...
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018, Dreamworld Co. began construction of a new
warehouse. The building was finished and ready for use on September
30, 2019. Expenditures on the project were as follows:
January 1, 2018
$
307,000
September 1, 2018
$
459,000
December 31, 2018
$
459,000
March 31, 2019
$
459,000
September 30, 2019
$
307,000
Dreamworld had $5,300,000 in 13% bonds outstanding through both
years.
The average accumulated expenditures for 2019 by the end of the
construction period was:
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