8. Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on June 1, and $1,500,000 on December 31. Zahir company borrowed $500,000 on March 1 on a 5-year, 12% note to finance the construction of building. In addition, the company had outstanding all year a 10%, 5-year $1,000000 note payable and an 11%, 4-year, $1,750,000 note payable. Compute the following: (a) Weighted-average accumulated expenditure (b) Capitalization rate used for interest capitalization purpose (c) Avoidable interest

8. Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on June 1, and $1,500,000 on December 31. Zahir company borrowed $500,000 on March 1 on a 5-year, 12% note to finance the construction of building. In addition, the company had outstanding all year a 10%, 5-year $1,000000 note payable and an 11%, 4-year, $1,750,000 note payable. Compute the following: (a) Weighted-average accumulated expenditure (b) Capitalization rate used for interest capitalization purpose (c) Avoidable interest

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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* Your answer is incorrect. Sheridan Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,872,000 on March 1, $1,272,000 on June 1, and $3,047,000 on December 31. Sheridan Company borrowed $1,008,000 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, $2,398,000 note payable and an 10%, 4-year, $3,715,000 note payable. Compute avoidable interest for Sheridan 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 0 decimal places, e.g. 5,275.) Avoidable interest $ eTextbook and Media 2302000
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Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000 non-interest-bearing note payable. Beginning on December 31, year 8, the debt will be paid off in ten equal yearly payments. The market rate of interest for this sort of note is 5%. Given the facts below, how much should Harper Co. report the equipment on its December 31, year 8 balance sheet? For ten periods, the present value of $1 at 5% is 0.61391. The present value of a $1 regular annuity at 5% for ten periods is 7.72173. The current value of a $1 annuity payable in ten periods at 5% is 8.10782 8.10782
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As during eighth year, Clark Company spent $2,400,000 on equipment for its own use. The project took a whole year to complete, and all expenditures were spread out evenly over the year. Clark was able to borrow $1,500,000 at 6% interest at the start of the term for the procurement of materials and the fabrication of the equipment. On December 31, year 8, the whole debt, including interest, was redeemed and replaced with a long-term loan. Clark Company has an extra debt of $1,000,000 in year 8, with a weighted average interest rate of 7%. What will Clark Corporation report as interest cost in year 8 if it capitalises the maximum amount of interest allowed under GAAP? Asap
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Jen Company had a 10% P1,000,000 specific construction loan and 12% P20,000,000 general loan outstanding during 2021. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2021. The following expenditures were made during 2021: January 1, 2021 1,000,000April 1, 2021 2,000,000December 1, 2021 3,000,0001) What is the cost of the building on December 31, 2021?
Headland Company is constructing a building Construction began on February 1 and was completed on December 31 . Expenditures were $2,076,000 on March 1,$1,224,000 on June 1 and $3,076,600 on December 31. Headland Company borrowed $1,155,090 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, $2,376,900 note payable and an 10%,4-year, $3,397,000 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, es. 7.58%.

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