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 | $ | 1,090,000 | |
| March 1, 2018 | 780,000 | ||
| June 30, 2018 | 980,000 | ||
| October 1, 2018 | 780,000 | ||
| January 31, 2019 | 297,000 | ||
| April 30, 2019 | 630,000 | ||
| August 31, 2019 | 927,000 | ||
On January 1, 2018, the company obtained a $3,300,000 construction
loan with a 16% interest rate. The loan was outstanding all of 2018
and 2019. The company’s other interest-bearing debt included two
long-term notes of $2,000,000 and $8,000,000 with interest rates of
10% and 12%, 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 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.
In: Accounting
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 $ 2,050,000 March 1, 2018 1,800,000 June 30, 2018 2,000,000 October 1, 2018 1,800,000 January 31, 2019 450,000 April 30, 2019 783,000 August 31, 2019 1,080,000 On January 1, 2018, the company obtained a $5,000,000 construction loan with a 9% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $6,000,000 and $9,000,000 with interest rates of 5% and 8%, 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 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.
In: Accounting
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 | $ | 1,240,000 | |
| March 1, 2018 | 660,000 | ||
| June 30, 2018 | 450,000 | ||
| October 1, 2018 | 650,000 | ||
| January 31, 2019 | 900,000 | ||
| April 30, 2019 | 1,215,000 | ||
| August 31, 2019 | 2,160,000 | ||
On January 1, 2018, the company obtained a $3 million construction
loan with a 12% interest rate. The loan was outstanding all of 2018
and 2019. The company’s other interest-bearing debt included two
long-term notes of $5,400,000 and $7,400,000 with interest rates of
6% and 8%, 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.
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.
In: Accounting
Related Information:
Lease term 2 years (8 quarterly periods)
Quarterly lease payments $7,500 at Jan 1, 2018 and at Mar 31,
June 30, Sept 30 and Dec 31 thereafter
Economic life of asset 2 years (straight-line, zero residual value, quarterly)
The interest rate needs to be calculated with the information provided
Required:
In: Accounting
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 | $ | 1,000,000 | |
| March 1, 2018 | 600,000 | ||
| June 30, 2018 | 800,000 | ||
| October 1, 2018 | 600,000 | ||
| January 31, 2019 | 270,000 | ||
| April 30, 2019 | 585,000 | ||
| August 31, 2019 | 900,000 | ||
On January 1, 2018, the company obtained a $3 million construction
loan with a 10% interest rate. The loan was outstanding all of 2018
and 2019. The company’s other interest-bearing debt included two
long-term notes of $4,000,000 and $6,000,000 with interest rates of
6% and 8%, 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.
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.
In: Accounting
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 $ 1,310,000 March 1, 2018 1,020,000 June 30, 2018 1,220,000 October 1, 2018 1,020,000 January 31, 2019 333,000 April 30, 2019 666,000 August 31, 2019 963,000 On January 1, 2018, the company obtained a $3,700,000 construction loan with a 12% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $3,000,000 and $7,000,000 with interest rates of 8% and 10%, 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 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.
In: Accounting
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 $ 1,310,000 March 1, 2018 1,020,000 June 30, 2018 1,220,000 October 1, 2018 1,020,000 January 31, 2019 333,000 April 30, 2019 666,000 August 31, 2019 963,000 On January 1, 2018, the company obtained a $3,700,000 construction loan with a 12% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $3,000,000 and $7,000,000 with interest rates of 8% and 10%, 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 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.
In: Accounting
Cost of Quality and Value-Added/Non-Value-Added Reports for a Service Company
Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows:
a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added.
| Quality Control Activities | Activity Cost | Quality Cost Classification | Value-Added/ Non-Value-Added Classification |
|
| Billing error correction | $41,200 | External failure | Non-value-added | |
| Cable signal testing | 99,400 | Appraisal | Value-added | |
| Reinstalling service (installed incorrectly the first time) | 88,500 | External failure | Non-value-added | |
| Repairing satellite equipment | 49,700 | Internal failure | Non-value-added | |
| Repairing underground cable connections to the customer | 26,800 | External failure | Non-value-added | |
| Replacing old technology cable with higher quality cable | 149,100 | Prevention | Value-added | |
| Replacing old technology signal switches with higher quality switches | 170,400 | Prevention | Value-added | |
| Responding to customer home repair requests | 49,400 | External failure | Non-value-added | |
| Training employees | 35,500 | Prevention | Value-added | |
| Total activity cost | $710,000 | |||
Feedback
Correct
b. Prepare a cost of quality report. Assume that sales are $2,840,000. If required, round percentages to one decimal place.
| Three Rivers Inc. | |||
| Cost of Quality Report | |||
| Quality Cost Classification |
Quality Cost | Percent of Total Quality Cost |
Percent of Total Sales |
| Prevention | $ | % | % |
| Appraisal | % | % | |
| Internal failure | % | % | |
| External failure | % | % | |
| Total | $ | % | % |
Feedback
c. Prepare a value-added/non-value-added analysis.
| Three Rivers Inc. | ||
| Value-Added/Non-Value-Added Activity Analysis | ||
| Category | Amount | Percent |
| Value-added | $ | % |
| Non-value-added | % | |
| Total | $ | % |
In: Accounting
Cost of Quality and Value-Added/Non-Value-Added Reports for a Service Company
Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows:
a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added.
| Quality Control Activities | Activity Cost | Quality Cost Classification | Value-Added/ Non-Value-Added Classification |
|
| Billing error correction | $27,100 | External failure | Non-value-added | |
| Cable signal testing | 94,400 | Appraisal | Value-added | |
| Reinstalling service (installed incorrectly the first time) | 58,400 | External failure | Non-value-added | |
| Repairing satellite equipment | 41,300 | Internal failure | Non-value-added | |
| Repairing underground cable connections to the customer | 17,600 | External failure | Non-value-added | |
| Replacing old technology cable with higher quality cable | 133,800 | Prevention | Value-added | |
| Replacing old technology signal switches with higher quality switches | 152,900 | Prevention | Value-added | |
| Responding to customer home repair requests | 32,600 | External failure | Non-value-added | |
| Training employees | 31,900 | Prevention | Value-added | |
| Total activity cost | $590,000 | |||
Feedback
b. Prepare a cost of quality report. Assume that sales are $2,950,000. If required, round percentages to two decimal places.
| Three Rivers Inc. | |||
| Cost of Quality Report | |||
| Quality Cost Classification | Quality Cost | Percent of Total Quality Cost | Percent of Total Sales |
| Prevention | $ | % | % |
| Appraisal | % | % | |
| Internal failure | % | % | |
| External failure | % | % | |
| Total | $ | % | % |
Feedback
c. Prepare a value-added/non-value-added analysis.
| Three Rivers Inc. | ||
| Value-Added/Non-Value-Added Activity Analysis | ||
| Category | Amount | Percent |
| Value-added | $ | % |
| Non-value-added | % | |
| Total | $ | % |
In: Accounting
The Reformulating the Balance Sheet:
Sample Balance Sheet:
Cash needed for operations200Accounts payable 300
Excess cash600Accrued expenses 250
Inventory400Current portion of Long term debt 150
Investment in marketable securities300Long term debt 1000
Plant property and Equipment 1100Stockholders Equity 900
Total assets 26002600
What are the two non-operating assets?What do they sum to?
What are the two non-operating liabilities?What do they sum to?
What are the three operating assets?What do they sum to?
What are the two operating liabilities?What do they sum to?
Calculate the invested capital.Calculate the net non-operating liability.
Please construct a balance sheet with invested capital on the left side and the sum of net non-operating liabilities and stockholders’ equity on the other, the balance sheet must balance.
In: Finance