ta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019:
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Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available:
- Capitalization period: January 1, 2019, to June 30, 2020
- Expenditures on project:
2019: January 1 $ 456,000 May 1 417,000 October 1 648,000 2020: March 1 1,512,000 June 30 708,000 - Amounts borrowed and outstanding:
$1.7 million borrowed at 10%, specifically for the project
$7 million borrowed on July 1, 2018, at 12%
$14 million borrowed on January 1, 2017, at 6%
Required:
Note: Round all final numeric answers to two decimal places.
- Compute the amount of interest costs capitalized each year.
Capitalized interest, 2019 $___________________ Capitalized interest, 2020 $___________________ - If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020.
$________________
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- Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 504,000 May 1 405,000 October 1 504,000 2020: March 1 1,392,000 June 30 540,000 Amounts borrowed and outstanding: $1.6 million borrowed at 10%, specifically for the project $6 million borrowed on July 1, 2018, at 12% $13 million borrowed on January 1, 2017, at 6% Instructions: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ fill in the blank 1 Capitalized interest, 2020 $ fill in the blank 2 If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. $ fill in the blank 3Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 456,000 May 1 489,000 October 1 588,000 2020: March 1 1,572,000 June 30 552,000 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $6 million borrowed on July 1, 2018, at 12% $10 million borrowed on January 1, 2017, at 6% Required: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ fill in the blank 1 Capitalized interest, 2020 $ fill in the blank 2 If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. $ fill in the blank 3Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: • Capitalization period: January 1, 2019, to June 30, 2020 • Expenditures on project: 2019: 2020: January 1 May 1 October 1 $ 540,000 537,000 600,000 March 1 June 30 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $7 million borrowed on July 1, 2018, at 12% $16 million borrowed on January 1, 2017, at 6% Required: 1,404,000 504,000 Note: Round all final numeric answers to two decimal places. 1. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ Capitalized interest, 2020 2. If it is assumed that the production complex has an estimated life of 25 years and a residual value of $0, compute the straight-line depreciation in 2020. $ 3. Since GAAP requires accrual accounting, if a company capitalizes interest during the construction period it will report will report income than…
- nterest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 492,000 May 1 441,000 October 1 648,000 2020: March 1 1,392,000 June 30 708,000 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $5 million borrowed on July 1, 2018, at 12% $12 million borrowed on January 1, 2017, at 6% Required: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ fill in the blank 1 Capitalized interest, 2020 $ fill in the blank 2 If it is assumed that the production complex has an estimated life of 25 years and a residual value of $0, compute the straight-line depreciation in 2020. $ fill in the blank 3 Since…Interest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 516,000 May 1 477,000 October 1 648,000 2020: March 1 1,404,000 June 30 684,000 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $8 million borrowed on July 1, 2018, at 12% $13 million borrowed on January 1, 2017, at 6% Required: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ fill in the blank 1 Capitalized interest, 2020 $ fill in the blank 2 If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. $ fill in the blank 3 Since GAAP…Interest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 May 1 $420,000 381,000 October 1 552,000 2020: March 1 June 30 Amounts borrowed and outstanding: 1,428,000 624,000 $1.6 million borrowed at 12%, specifically for the project $4 million borrowed on July 1, 2018, at 14% $18 million borrowed on January 1, 2017, at 8% Required: Note: Round all final numeric answers to two decimal places. 1. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ 933,000 X Capitalized interest, 2020 $ 2,052,000 X 2. If it is assumed that the production complex has an animated life of years and a residual value of $0, compute the straight-line depreciation in 2020. Alpha-numeric input field 115,825 X $ 3. Since GAAP requires accrual accounting, if a company capitalizes…
- Interest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1,2019 to june 30,2020 Expenditures on project: Amounts borrowed and outstanding $1.5 million borrowed at 12% specifically for the project $6 million borrowed on July 1, 2015 at 14% $14 million borrowed on January 1,2014, at 8% Required : 1. Compute the amount of intrest costs capitalized each year 2. If it is assumed tha the production complex has an extimated life of 20years and a residual value of $0, Compute the straight - line depreciation in 2020 3. Next Level Explain the effects of the interest capitalization on the financial statements for both years ignore income taxes.Interest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 624,000 May 1 501,000 October 1 612,000 2020: March 1 1,596,000 June 30 660,000 Amounts borrowed and outstanding: $1.5 million borrowed at 12%, specifically for the project $8 million borrowed on July 1, 2018, at 14% $14 million borrowed on January 1, 2017, at 8% Required: Note: Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 Capitalized interest, 2020 If it is assumed that the production complex has an estimated life of 25 years and a residual value of $0, compute the straight-line depreciation in 2020. __________ Since GAAP requires accrual…QuestionAt beginning of the year 2020, you have a bank loan and overdraft of $687,000 and the following Assets:Development cost Development $85,000Land and building $320,000Plant and Machinery $125,000Current asset: Inventory $210,000 and Receivables $500,000Current liability: Payables $393,000 and Revaluation gain on Land and Building is $50,000Note: In full satisfaction of the GHC687,000 owing, the bank agrees to accept an immediate payment of GHC87,000 and to consolidate the balance of GHC600,000 into a loan, carrying interest of 20% per annum, repayable in year 2020. The loan is to be secured by a fixed charge on the land and buildings and a floating charge on the company's remaining assets.How will you treat this transactions in the balance sheet.
- Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, Year 1, to June 30, Year 2 Expenditures on project: Year 1: January 1 $ 576,000 May 1 357,000 October 1 540,000 Year 2: March 1 1,476,000 June 30 708,000 Amounts borrowed and outstanding: $1.3 million borrowed at 12%, specifically for the project $7 million borrowed on January 1, Year 1, at 14% $18 million borrowed on January 1, Year 1, at 8% Round all final numeric answers to two decimal places. Compute the amount of interest costs capitalized each year. Capitalized interest, Year 1 $ Capitalized interest, Year 2 $ If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in Year 2.Benson Limited is constructing a Power Plant which was completed on 31st December 2019. The company obtained a bank loan of R1,000,000 at a rate of 15% per annum to construct the Power Plant on 1st January 2019. As of 31st December 2019, Benson Limited also had the following loans outstanding: 18% 5-year loan Note of R1,500,000 14% Debentures of R1,000,000 Expenditures on the project were made as follows: On the 31st March 2019, R600,000 was incurred; R800,000 was incurred on 30th June 2019; The final expenditure incurred was R300,000 on 31st December 2019. During the year Benson Limited invested R400,000 of the bank loan for 2 months at an interest of 9% per annum. Required: Determine the amount of borrowing costs to be capitalized and expensed. I. II. I. II. III.asap Benson Limited is constructing a Power Plant which was completed on 31st December 2019. The company obtained a bank loan of R1,000,000 at a rate of 15% per annum to construct the Power Plant on 1st January 2019. As of 31st December 2019, Benson Limited also had the following loans outstanding: I. 18% 5-year loan Note of R1,500,000 II. 14% Debentures of R1,000,000 Expenditures on the project were made as follows: I. On the 31st March 2019, R600,000 was incurred; II. R800,000 was incurred on 30th June 2019; III. The final expenditure incurred was R300,000 on 31st December 2019. During the year Benson Limited invested R400,000 of the bank loan for 2 months at an interest of 9% per annum. Required: Determine the amount of borrowing costs to be capitalized and expensed.