On March 1, Imhoff Co. began construction of a small building. Payments of $800,000 were made monthly for three months beginning March 1. The building was completed and ready for occupancy on June 1. In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are

On March 1, Imhoff Co. began construction of a small building. Payments of $800,000 were made monthly for three months beginning March 1. The building was completed and ready for occupancy on June 1. In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 3RE: Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that...

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A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $610,000; March 31, $710,000; June 30, $510,000; October 30, $930,000. The company arranged a 10% loan on January 1 for $920,000. Assume the $920,000 loan is not specifically tied to the construction of the building. The company's other borrowings, outstanding for the whole year, consisted of a $2 million loan and a $4 million note with interest rates of 12% and 9%, respectively. Assuming the company uses the weighted-average method, calculate the amount of interest capitalized for the year. Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%). * Answer is complete but not entirely correct. Date January 1 March 31 June 30 October 30 Accumulated expenditures Average accumulated…
A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $680,000; March 31, $780,000; June 30, $580,000; October 30, $1,140,000. To help finance construction, the company arranged a 9% construction loan on January 1 for $1,060,000. The company's other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 10% and 8%, respectively. Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year. Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%). Date January 1 March 31 June 30 October 30 Accumulated expenditures Average accumulated expenditures Expenditure Amount X X X Weight Interest Rate % % "1 II = = Average…
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A company began constructing a new warehouse for its operations during the current year. In the year the company incurred interest of $20,000 on a working capital loan, and interest on a construction loan for the warehouse of $80,000. Interest computed on the average accumulated expenditures for the warehouse construction was $40,000. What amount of interest should be expensed for the year?
A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $700,000; March 31, $800,000; June 30, $600,000; October 30, $1,200,000. The company arranged a 8% loan on January 1 for $1,100,000. Assume the $1,100,000 loan is not specifically tied to the construction of the building. The company's other borrowings, outstanding for the whole year, consisted of a $7 million loan and a $9 million note with interest rates of 10% and 6%, respectively. Assuming the company uses the weighted-average method, calculate the amount of interest capitalized for the year. Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%). Date January 1 March 31 June 30 October 30 Expenditure Weight Average Accumulated expenditures S 0 S 0 Amount Interest Rate…
Vaughn Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,968,000 on March 1, $1,248,000 on June 1, and $3,046,000 on December 31. Vaughn Company borrowed $1,086,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,448,000 note payable and an 10%, 4-year, $3,546,000 note payable. Compute avoidable interest for Vaughn Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $