Question
In: Accounting
During 2020, Susan Building Company constructed various assets at a total cost of $12,600,000. The weighted...
During 2020, Susan Building Company constructed various assets
at a total cost of $12,600,000. The weighted average accumulated
expenditures on assets qualifying for capitalization of interest
during 2020 were $8,138,000. The company had the following debt
outstanding at December 31, 2020:
| 1. | 10%, 5-year note to finance construction of various assets, dated January 1, 2020, with interest payable annually on January 1 | $5,452,000 | ||
| 2. | 12%, ten-year bonds issued at par on December 31, 2014, with interest payable annually on December 31 | 5,946,000 | ||
| 3. | 9%, 3-year note payable, dated January 1, 2019, with interest payable annually on January 1 | 2,973,000 |
Compute the amounts of each of the following.
| 1. | Avoidable interest | $ | |
| 2. | Total interest to be capitalized during 2020 | $ |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
During 2020, Maria Building Company constructed various assets at a total cost of $12,600,000. The weighted...
During 2020, Maria Building Company constructed various assets
at a total cost of $12,600,000. The weighted average accumulated
expenditures on assets qualifying for capitalization of interest
during 2020 were $8,347,000. The company had the following debt
outstanding at December 31, 2020:
1.
10%, 5-year note to finance construction of various assets,
dated January 1, 2020, with interest payable annually on January
1
$5,388,000
2.
12%, ten-year bonds issued at par on December 31, 2014, with
interest payable annually on December...
During 2020, Barden Building Company constructed various assets at a total cost of $14,700,000. The weighted...
During 2020, Barden Building Company constructed various assets
at a total cost of $14,700,000. The weighted average accumulated
expenditures on assets qualifying for capitalization of interest
during 2020 were $9,800,000. The company had the following debt
outstanding at December 31, 2020:
1. 10%, 5-year note to finance construction of
various assets,
dated January 1, 2020, with
interest payable annually on January
1
$6,300,000
2. 12%, ten-year bonds issued at par on December 31,
2014, with interest
payable annually...
During 2020, Barden Building Company constructed various assets at a total cost of $14,700,000. The weighted...
During 2020, Barden Building Company constructed various assets
at a total cost of $14,700,000. The weighted average accumulated
expenditures on assets qualifying for capitalization of interest
during 2020 were $9,800,000. The company had the following debt
outstanding at December 31, 2020:
1. 10%, 5-year note to finance construction of
various assets,
dated January 1, 2020, with
interest payable annually on January
1 $6,300,000
2. 12%, ten-year bonds issued at par on December 31,
2014, with interest
payable annually...
During 2018, Barden Building Company constructed various assets at a total cost of $10,500,000. The weighted...
During 2018, Barden Building Company constructed various assets
at a total cost of $10,500,000. The weighted average accumulated
expenditures (WAAE) on assets qualifying for capitalization of
interest during 2018 were $7,000,000. The company had the following
debt outstanding at December 31, 2018: • 10%, 5-year note to
finance construction of various assets, dated January 1, 2017, with
interest payable annually on January 1 $4,500,000 • 12%,
twelve-year bonds issued at par on December 31, 2009, with interest
payable annually on...
During 2020, GR Engineering Company constructed a building for its own use at a total cost...
During 2020, GR Engineering Company constructed a building for
its own use at a total cost of $14,700,000.
The weighted average accumulated expenditures on assets
qualifying for capitalization of interest during 2020 were
$10,200,000. The company had the following debt outstanding at
December 31, 2020: 1. 10%, 5-year note to finance construction of
this building, dated January 1, 2020, with interest payable
annually on January 1 $6,300,000 2. 12%, ten-year bonds issued at
par on December 31, 2014, with interest...
During 2017, Barden Building Company constructed own equipment at a total cost of $16,650,000. Date Capitalization...
During 2017, Barden Building Company constructed own equipment
at a total cost of $16,650,000.
Date
Capitalization Expenditure
Period
The weighted average accumulated
expenditures
1-Apr
$5,000,000
1-Jun
$7,000,000
31-Aug
$3,650,000
31-Dec
$1,000,000
Total
$16,650,000
The company had the following debt outstanding at December 31,
2017:
1. 10%, 5-year note to finance construction of
various assets,
dated April 1,
2017, with interest payable annually on January
1
$6,300,000
2. 13.5%, ten-year bonds issued at par on December
31, 2011, with interest...
Coronado Industries Inc. constructed a building and acquired five assets during the current year. Construction of...
Coronado Industries Inc. constructed a building and acquired
five assets during the current year.
Construction of Building: A building was
constructed on land purchased last year at a cost of $216,000.
Construction began on February 1 and was completed on November 1.
The payments to the contractor were as follows.
Date
Payment
March 1
$324,000
July 1
247,500
October 1
292,500
Coronado obtained a $630,000, 8% construction loan on March 1.
Coronado repaid the loan on October 1. Coronado had...
1. Han Industries Inc. constructed a building and acquired five assets during the current year. Construction...
1. Han Industries Inc. constructed a building and acquired five
assets during the current year.
Construction of Building: Han constructed a building on land
that it purchased last year at a cost of $240,000. Construction
began on March 1 and was completed on October 1. The payments to
the contractor were as follows.
Date
Payment
March 1 $360,000
July 1 275,000
October 1 325,000
Han obtained a $700,000, 8% construction loan on March 1. Han
repaid the loan on October...
Novak Company constructed a building at a cost of $2,684,000 and occupied it beginning in January...
Novak Company constructed a building at a cost of $2,684,000 and
occupied it beginning in January 1998. It was estimated at that
time that its life would be 40 years, with no salvage value.
In January 2018, a new roof was installed at a cost of $366,000,
and it was estimated then that the building would have a useful
life of 25 years from that date. The cost of the old roof was
$195,200.
1) What entry should be made...
Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in...
Greg Maddox Company constructed a building at a cost of
$2,200,000 and occupied it beginning in January 2001. It was
estimated at that time that its life would be 40 years, with no
salvage value. In January 2021, a new roof was installed at a cost
of $300,000, and it was estimated then that the building would have
a useful life of 25 years from that date. The cost of the old roof
was $160,000. Instructions a. What amount of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Note: The answers to the following questions should be typed in the block of comments in...
- Python Describe the procedure for setting up the display of an image in a window.
- what are the fundamental similarity and differences between gap and dgap?
- Maria Gonzales is a 57-year-old operating room nurse who works full-time at a local hospital. She...
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
ADVERTISEMENT