Based on this strategy, what is Chambers's expense associated with organization costs in 2017? $33,000 $28,000 $6,000 $18,000
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The Chambers Corporation was formed in early 2017. At the time of formation, Chamber spent the following amounts: accounting fees, $4,000; legal fees, $8,000; stock certificate costs, $3,000; initial franchise fee, $10,000; initial lease payment, $5,000; promotional fees, $3,000. Chamber intends to capitalize and amortize intangibles over the maximum allowable period in accordance with generally accepted accounting principles. Based on this strategy, what is Chambers's expense associated with organization costs in 2017?
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- R. Wilson Corporation commenced operations in early 2017. The corporation incurred $60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries torecord the $60,000 expenditure and 2017 amortization, if any.Queen Company purchased a varnishing machine for P3,000,000 on January 1, 2017. The entity received a government grant of P500,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. What amount of income from the government grant is recognized in 2017?Arcana Company self-constructed an asset for its own use. Construction stated on January 1, 2017 and the asset was completed on December 31, 2017. The company had a two-year, 18% loan of P500,000, specifically obtained to finance the asset construction. Funds not yet needed during the construction were temporarily invested in a short-term debt securities yielding a P10,000 interest revenue. Costs incurred during the year were as follows: January 1 – P400,000 April 1 – P500,000 August 1 – P480,000 December 1 – P180,000 1) What is the capitalized interest added to the cost of the self-constructed asset? A. 90,000 B. 80,000 C. 180,000 D. 0 2) How much is the total cost of the self-constructed asset? A. 1,650,000 B. 1,560,000 C. 1,640,000 D. 1,070,000
- (Capitalization of Interest) On July 31, 2017, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Amsterdam issued a $300,000, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $200,000 of the proceeds of the note was paid to Minsk on July 31. The remainderof the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Amsterdam made a final $100,000 payment to Minsk. Other than the note to Netherlands, Amsterdam’s only outstanding liability at December 31, 2017, is a $30,000, 8%, 6-year note payable, dated January 1, 2014, on which interest is payable each December 31.Instructions(a) Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest…Assuming that the effects of interest capitalization are material, calculate the amount ofinterest costs to be capitalized by Matthew Corporation in 2014 in relation to the following events: On January 1, Matthew began construction for a new storage building for its own use. Expenditures incurred evenly throughout the year totaled $900,000. Matthew borrowed $1,000,000 specifically for construction of the storage building at an annual interest rate of 6%. What is the amount of interest that should be capitalized? a. $54,000b. $27,000c. $2,700d. $0 Inventories costing $200,000 were routinely manufactured during the year. Matthew borrowed $200,000 at 8% to finance inventory-related costs. What is the amount of interest that should be capitalized? a. $16,000b. $8,000c. $800d. $0 On September 1, Matthew began construction of a custom-designed machine to the specifications of a customer. As of December 31, $200,000 of materials, labor, and overhead have been assigned to the machine.…Kobe Company began constructing a building for its own use in February 2017. During 2017, Kobe incurred interest of $70,000 on specific construction debt and $15,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2017 was $60,000. Required: What amount of interest should Kobe capitalize? Prepare the journal entry to record payment of the interest. If interest computed on the weighted-average amount of accumulated expenditures for the building during 2017 was instead $90,000, what amount of interest should Kobe capitalize?
- The following selected transactions relate to liabilities of Chicago Glass Corporation for 2024. Chicago's fiscal year ends on December 31. On January 15, Chicago received $7,400 from Henry Construction toward the purchase of $70,000 of plate glass to be delivered on February 6. On February 3, Chicago received $7,100 of refundable deposits relating to containers used to transport glass components. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price. First quarter credit sales totaled $740,000. The state sales tax rate is 4% and the local sales tax rate is 2%. Required: Prepare journal entries for the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances:Intra-entity sales of $320,000 occurred during 2017 and again in 2018. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2017, with $50,000 unsold on December 31, 2018.a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?b. Prepare a consolidated income statement for the year ending December 31, 2018.This topic is about borrowing costs. Please choose the letter of the correct answer.
- During 2021, Tiktok Company constructed various assets. The weighted average expenditures for capitalization of interest during 2021 amounted to P 5,600,000. The entity had the following debt outstanding at December 31, 2021: • From BPI (specific borrowing), P 3,600,000, 10% • From BDO (general borrowing), P 4,000,000, 12% • From PNB (general borrowing), P 2,000,000, 9% QUESTION 1: What is the capitalized borrowing costs for the year ended December 31, 2021? I Select 1 QUESTION 2: What is the interest expense for the year ended December 31, 2021? I Select 1Why the amount of $35.3million is not used in the calculation of the carrying amount of financial asset? Epsilon prepares financial statements to 31 March each year. The following event has occurred which are relevant to the year ended 31 March 2018: On 1 April 2017, Epsilon loaned $30 million to another entity. Interest of $1·5 million is payable annually in arrears. An additional final payment of $35·3 million is due on 31 March 2020. Epsilon incurred direct costs of $250,000 in arranging this loan. The annual rate of interest implicit in this arrangement is approximately 10%. Epsilon has no intention of assigning this loan to a third party at any time. Required:Explain and show how the three events should be reported in the financial statements of Epsilon for the year ended 31 March 2018. You should assume that Epsilon only measures financial assets at fair value through profit or loss when required to do so by IFRS 9Information concerning Sandro Corporation's intangible assets is as follows. 1. On January 1, 2020, Sandro signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $75,000. Of this amount, $15,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 14% (the implicit rate for a loan of this type) is $43,700. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sandro's revenue from the franchise for 2020 was $900,000. Sandro estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) 2.…