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On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions):
July 1, 2020 | 94 |
October 1, 2020 | 62 |
February 1, 2021 | 70 |
April 1, 2021 | 41 |
September 1, 2021 | 40 |
October 1, 2021 | 26 |
On July 1, 2020, Crocus obtained a $110 million construction loan with a 6% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 8%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.
What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
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- On June 1, 2023, a company began construction of a new manufacturing plant. The plant was completed on October 31, 2024. Expenditures on the project were as follows ($ in millions): July 1, 2023 88 October 1, 2023 56 February 1, 2024 64 April 1, 2024 38 September 1, 2024 37 October 1, 2024 23 On July 1, 2023, the company obtained a $104 million construction loan with a 8% interest rate. The loan was outstanding through the end of October, 2024. The company's only other interest - bearing debt was a long-term note for $100 million with an interest rate of 10%. This note was outstanding during all of 2023 and 2024. The company's fiscal year end is December 31. What is the amount of interest that should be capitalized in 2023, using the specific interest method? Multiple Choice $4.59 million S 4.64 million $5.65 million None of the other answer choices are correctSolomon Company constructed its own office building. The company had a P 1,000,000 two-year 12% loan specifically obtained to finance the asset construction. The construction began on January 1, 2021 and the building was completed on December 31, 2021. Expenditures on the building were made as follows: January 1, 2021 - P 1,600,000 April 30, 2021 - P 600,000 • November 11, 2021 - P 1,200,000 Solomon has the following outstanding general borrowings: BPI at 10% for P 1,500,000 and BDO at 12% for P 2,500,000. QUESTION 1: How much is the borrowing to be capitalized by Solomon Company? P 256,800 QUESTION 2: How much is the total finance cost for the year 2021?On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,740,000 March 1, 2021 1,380,000 June 30, 2021 1,580,000 October 1, 2021 1,380,000 January 31, 2022 387,000 April 30, 2022 720,000 August 31, 2022 1,017,000 On January 1, 2021, the company obtained a $4,300,000 construction loan with a 12% interest rate. The loan was outstanding all of 2021 and 2022. 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 2021 and 2022. 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 2021 and 2022 using the specific interest method. 2. What is the total cost of the…
- On January 1, 2021, Company A began the construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: Company A January 1, 2021 $2,000,000 March 1, 2021 1,600,000 June 30, 2021 1,800,000 October 1, 2021 1,600,000 January 31, 2022 1,270,000 April 30, 2022 1,585,000 August 31, 2022 1,900,000 Construction loan amount $4,000,000 Construction loan interest rate 8% Long-term note $5,000,000 Long-term note interest rate 4% Long-term note $7,000,000 Long-term note interest rate 6% On January 1, 2021, the company obtained a $4 million construction loan with a 8% interest rate. The loan was outstanding all of 2021 and 2022. The company's other interest-bearing debt included two long-term notes of $5,000,000 and 7,000,000 with interest rates of 4% and 6%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company's fiscal year-end is…On January 2, 2020, IRG Company began the construction of a small processing plant. The plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 P 200,000 September 1, 2020 600,000 December 31, 2020 600,000 March 31, 2021 600,000 September 30, 2021 400,000 IRG borrowed P 1,100,000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. a. What were the weighted-average accumulated expenditures for 2020? b. The interest capitalized for 2020 is ___________. c. What were the weighted-average accumulated expenditures for 2021 by the end of the construction period? d. The interest capitalized for 2021 is _____________ e. Interest expense for the year 2020 is ___________On January 2, 2020, Sheridan Company began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 $ 594000 September 1, 2020 1806000 December 31, 2020 1806000 March 31, 2021 1806000 September 30, 2021 1193000 Sheridan Company borrowed $3320000 on a construction loan at 10% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $12960000 in 7% bonds outstanding in 2020 and 2021.What were the weighted-average accumulated expenditures for 2021 by the end of the construction period? a $4325600 b $5953200 c $4147200 d $903000