Current Attempt in Progress Riverbed Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of €4,020,000 on January 1, 2022. Riverbed expected to complete the building by December 31, 2022. Riverbed has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2021 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2023 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2026 €1,610,000 1.288.000 805,000 (a) Assume that Riverbed completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,186,000. The following expenditures were made during the period forthis project: January 1, €805,000; April 1, €1,205,000; July 1, €1,605,000; and October 1, €560,000. Excess funds from the construction loans were invested during the period and earned €16,200 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to O decimal places, e.g. 5,275.) Borrowing costs €
Current Attempt in Progress Riverbed Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of €4,020,000 on January 1, 2022. Riverbed expected to complete the building by December 31, 2022. Riverbed has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2021 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2023 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2026 €1,610,000 1.288.000 805,000 (a) Assume that Riverbed completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,186,000. The following expenditures were made during the period forthis project: January 1, €805,000; April 1, €1,205,000; July 1, €1,605,000; and October 1, €560,000. Excess funds from the construction loans were invested during the period and earned €16,200 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to O decimal places, e.g. 5,275.) Borrowing costs €
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Current Attempt in Progress
Riverbed Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of
€4,020,000 on January 1, 2022. Riverbed expected to complete the building by December 31, 2022. Riverbed has the following debt
obligations outstanding during the construction period.
Construction loan-12% interest, payable semiannually, issued December 31, 2021
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2023
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2026
€1,610,000
1.288.000
805,000
(a)
Assume that Riverbed completed the office and warehouse building on December 31, 2022, as planned at a total cost of
€4,186,000. The following expenditures were made during the period forthis project: January 1, €805,000; April 1, €1,205,000;
July 1, €1,605,000; and October 1, €560,000. Excess funds from the construction loans were invested during the period and
earned €16,200 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest
rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to O decimal places, e.g. 5,275.)
Borrowing costs
€
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