During 2022, Pearl SA constructed and manufactured certain assets and incurred the following borrowing costs in connecti with those activities. Warehouse constructed for Pearl's own use Special-order machine for sale to unrelated customer, produced according to customer's specifications Inventories routinely manufactured, produced on a repetitive basis Borrowing Costs Incurred R$28,200 The total amount of borrowing cost to be capitalized R$ 8,460 7,520 All of these assets required an extended period of time for completion. Assuming the effect of borrowing cost capitalization is material, what is the total amount of borrowing cost to be capitalized?

During 2022, Pearl SA constructed and manufactured certain assets and incurred the following borrowing costs in connecti with those activities. Warehouse constructed for Pearl's own use Special-order machine for sale to unrelated customer, produced according to customer's specifications Inventories routinely manufactured, produced on a repetitive basis Borrowing Costs Incurred R$28,200 The total amount of borrowing cost to be capitalized R$ 8,460 7,520 All of these assets required an extended period of time for completion. Assuming the effect of borrowing cost capitalization is material, what is the total amount of borrowing cost to be capitalized?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,090,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 145,000 590,000 155,000 200,000 $ 1,090,000 Estimated Residual Value N/A none 12% of cost $ 16,000 Required 1 Estimated Useful Life (in On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $109,000 was sold for $89,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. years). N/A 20 10 118 Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2025, and the…
What are the answers to Required 1 (the depreciation expenses for 2021), Required 2 (the two journal entries), and Required 3 (the depreciation expenses for 2022)?
Need help with this question
7. On January 1, 2020 Gingerbread, Corp. purchased a reindeer merry-go-round as an attraction to draw customers during the holiday season. The following information is available: Invoice price $280,000 Shipping cost $4,000 Set-up cost $2,000 Insurance to cover years 2020 and 2021 $12,000 Necessary repair during set-up 500 Determine the amount to be record as the capitalized cost of the asset. a.286,000 b.280,000 c.286,500 d.298,500
The following schedule reflects the incremental costs and revenues for acapital project. The company uses straight-line depreciation. The interestexpense reflects an allocation of interest on the amount of this investment,based on the company’s weighted average cost capital:Revenues $650,000Direct costs $270,000Variable overhead 50,000Fixed overhead 20,000Depreciation 70,000General & administrative 40,000Interest expense 8,000458,000Net profit before taxes $192,000══════The annual cash flow from this investment, before tax considerations, would be:
Danube, Toggle, and ConnectOn rely on various intangible assets to operate their businesses. These companies amortize the cost of these assets using the straight-line method over the following average estimated useful lives (in years), as reported in their annual reports. Type of Intangible Asset Developed Technology Danube 5.4 Trade Names 5.9 Toggle 5.6 10.1 ConnectOn 3.5 11.5 Customer Relationships 5.1 5.5 7.5 Required: 1. Based on these estimates, identify the company that uses the longest periods for amortizing most of its classes of intangible assets. Toggle Danube ConnectOn 2. Will these estimates increase or decrease that company's net income relative to its competitors? Increase Decrease
On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,070,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 135,000 570,000 170,000 195,000 $ 1,070,000 Estimated Residual Value N/A none 12% of cost $ 15,000 Estimated Useful Life (in years) N/A 20 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $107,000 was sold for $87,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required 1 Required 2 Required 3 Building 8 Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the equipment sold on…
On March 31, 2024, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $900,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 150,000 400,000 200,000 150,000 $ 900,000 Estimated Residual Value N/A none 12% of cost $ 15,000 Estimated Useful Life (in years) N/A 25 On June 29, 2025, equipment included in the March 31, 2024, purchase that cost $90,000 was sold for $70,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required 1 Required 2 Required 3 Building Equipment Vehicles Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2024. 2. Prepare the journal entries to record the depreciation on the…
Domestic
On March 31, 2021, Company A purchased a manufacturing facility along with vehicles and other equipment. The distribution of the total purchase price of $1,500,000 to the various types of assets, along with the estimated useful lives and residual values is as follows: The purchase on March 31, 2021 included equipment at the purchase cost of $150,000. The company sold equipment for $120,000 on June 29, 2022. Company A uses the following depreciation methods: straight-line depreciation method for buildings and equipment double-declining-balance method for vehicles Company A calculates partial-year depreciation based on the number of months an asset is in service. Company A Asset & Cost Land $150,000 Building $750,000 Equipment $360,000 Vehicles $240,000 Total $1,500,000 On June 29, 2022, equipment inculded in the March 31, 2021, purchase that cost $150,000 and was sold for $120,000. Company A uses the straight line depreciation method for buildings and equipment and the…
At 30 June 2020, White Ltd reported the following cash-generating unit, with the carrying amount totaling $530,000: Land 200,000 Equipment 600,000 Accumulated (300,000) depreciation - Equipment Goodwill 30,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2020, the recoverable amount of the cash-generating unit was $480,000. For the period ending 30 June 2021, the depreciation charge on the equipment was $38,000. If the equipment had not been impaired the charge would have been $41,000. At 30 June 2021, the recoverable amount of the unit was calculated to be $15,000 greater than the carrying amount of the assets of the unit. As a result, White Ltd recognized a reversal of the previous year's impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2020 and impairment reversal at 30 June 2021.
Please help solve