On March 1, 2010, Dennis Company purchased land for an office site by paying$540,000 cash. Dennis began construction on the office building on March 1.The following expenditures were incurred for construction:March 1, 2010 - $360,000April 1, 2010 - $504,000May 1, 2010 - $900,000June 1, 2010 - $1,440,000The office was completed and ready for occupancy on July 1. To help pay forthe construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-yearnote payable. Other than the construction note, the only debt outstandingduring 2010 was a $300,000, 11%, 6-year note payable dated January 1, 2010.(Hint: Be sure to include the cost of land in the total March 1 expenditureamount)Use commas, but do not use $ signs or cents.1. How much are the weighted-average accumulated expenditures on theconstruction project during 2010? How much was the actual interest cost during 2010?Question 82.5 ptsAssume the weighted average accumulated expenditures for the constructionproject are $870,000.What is the amount of interest cost to be capitalized for 2010?

Step 1 - Weighted-Average Accumulated ExpendituresTo determine the amount of interest cost to be…

Answered: On March 1, 2010, Dennis Company…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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On January 1, 2020, Sunland Company purchased land for an office site by paying $2680000 cash. Sunland began construction on the office building on January 1. The following expenditures were incurred for construction: Date Expenditures January 1, 2020 $ 1780000 April 1, 2020 2530000 May 1, 2020 4490000 June 1, 2020 4720000 The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $3650000 was borrowed on January 1, 2020 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2020 was a $1400000, 12%, 6-year note payable dated January 1, 2020. Assume the weighted-average accumulated expenditures for the construction project are $4300000. The amount of interest cost to be capitalized during 2020 is $441750. $387000. $496500. $406500...
Marigold Corp. is constructing a building. Construction began January 1, 2017 and the building was completed 12/31/17. Marigold made payments to the construction company of $2,994,000 on 7/1, $6,216,000 on 9/1, and $5,910,000 on 12/31. Weighted-average accumulated expenditures were A. $3,569,000 B. $9,210,000 C. $15,120,000 D. $3,044,000
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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. 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 12% and 14%, 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…
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