Interest to capitalize $
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![Meriter Company began construction of a new building during 2025. The building is expected to be
completed on December 31, 2025. During 2025, payments to the contractor are $500,000 on
January 4, $300,000 on May 1, and $420,000 on October 1. Meriter has secured a construction loan
of $500,000 at 6% interest on January 4, 2025. The company also has $10,000,000 in 9% bonds
outstanding in 2026 and 2025. What is the interest amount to capitalize?
Interest to capitalize
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- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?Metlock Company began construction of a new building during 2025. The building is expected to be completed on December 31, 2025. During 2025, payments to the contractor are $540,000 on January 4, $252,000 on May 1, and $456,000 on October 1. Metlock has secured a construction loan of $506,000 at 6% interest on January 4, 2025. The company also has $8,850,000 in 9% bonds outstanding in 2026 and 2025. What is the interest amount to capitalize? Interest to capitalize $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit AnswerMetlock Company began construction of a new building during 2025. The building is expected to be completed on December 31, 2025. During 2025, payments to the contractor are $540,000 on January 4, $252,000 on May 1, and $456,000 on October 1. Metlock has secured a construction loan of $506,000 at 6% interest on January 4, 2025. The company also has $8,850,000 in 9% bonds outstanding in 2026 and 2025. What is the interest amount to capitalize? Interest to capitalize $
- Bonita Corporation began constructing a new plant facility in 2025. The building is expected to be completed on October 1, 2025. 2025 payments to the contractor are $204,000 on January 4, $336,000 on April 1, $312,000 on July 1 and $114,000 on September 1. Bonita has secured a construction loan of $600,000 at 6% interest on January 4, 2025. Bonita has no other debt outstanding. What is the interest amount to capitalize? Interest to capitalize $On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,080,000 March 1, 2021 900,000 June 30, 2021 320,000 October 1, 2021 700,000 January 31, 2022 720,000 April 30, 2022 1,035,000 August 31, 2022 1,800,000 On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,000,000 and $7,000,000 with interest rates of 5% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required: Calculate the amount of interest that Mason should…Biotyme Corporation began constructing a new plant facility in 2025. The building is expected to be completed on October 1, 2025. 2025 payments to the contractor are $200,000 on January 4, $300,000 on April 1, $350,000 on July 1 and $120,000 on September 1. Biotech has secured a construction loan of $500,000 at 5% interest on January 4, 2025. Biotyme has no other debt outstanding. What is the interest amount to capitalize?
- On January 1, 2023, Marigold Inc. signed a fixed-price contract to have Builder Associates construct a major head office facility a a cost of $4 million. It was estimated that it would take three years to complete the project. Also, on January 1, 2023, to finance the construction cost, Marigold borrowed $4 million that is repayable in 10 annual instalments of $400,000, plus interest at the rate of 10%. During 2023, Marigold made deposit and progress payments totalling $1.5 million under the contract; the weighted average amount of accumulated expenditures was $791,000 for the year. The excess amount of borrowed funds was invested in short-term securities, from which Marigold realized investment income of $24,300. For situation 1, what amount should Marigold report as capitalized borrowing costs at December 31, 2023? (If an answer is zero, please enter O. Do not leave any fields blank.) Capitalized borrowing $ 375700Starks firm wanted to construct a new parking lot and storage area and for that reason they signed a 5 Million contract with Lannister company limited. The work began during March 2022 and the project was completed by the end of 2024. You have the following notes related to each year: Year 1: at the end of 2022 the estimated total cost for the contract was 4,000,000 in which one quarter incurred by the end of 2022. The company billed the contractor with 30%(70% of billed amount was collected during the year) Year 2: at the end of 2023 total estimated cost increased by 30 % from last year estimations and the company's cost to date were 3 Million. The company billed the contractor with 70% in both years (year 1 and year2) (70% of billed amount was collectedduring year 1 and year 2) Year 3: the company finished the contract with total cost of 5.4 Million. The remaining of unbilled revenues was billed during the last year and only 5% remained uncollected.Braxton Technologies, Incorporated, constructed a conveyor for A&G Warehousers that was completed and ready for use on January 1, 2024. • A&G paid for the conveyor by Issuing a $100,000, four-year note that specified 5% Interest to be paid on December 31 of each year, and the note is to be repaid at the end of four years. • The conveyor was custom-built for A&G, so Its cash price was unknown. • By comparison with similar transactions it was determined that a reasonable Interest rate was 10%. Required: 1. Prepare the journal entry for A&G's purchase of the conveyor on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the note. 3. Prepare the journal entry for A&G's third Interest payment on December 31, 2026. 4. If A&G's note had been an installment note to be paid in four equal payments at the end of each year beginning December 31, 2024, what would be the amount of each installment? 5. By considering the installment payment of requirement 4, prepare an…
- help in detailOriole Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1650000 each quarter. The total contract price is $18762000 and Oriole estimates total costs of $17900000. Oriole estimates that the building will take 3 years to complete, and commences construction on January 2, 2021.At December 31, 2022, Oriole Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18100000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2022 for Oriole as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit? Difference between the accounts Debit/Credit $871500 Credit $4690500 Credit $871500 Debit $375000 DebitEarly in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased by paying $270,000 immediately and signing a noninterest-bearing note requiring the company to pay $670,000 on March 28, 2023. An interest rate of 8% properly reflects the time value of money for this type of loan agreement. Title search, insurance, and other closing costs totaling $27,000 were paid at closing.At the end of April, the old building was demolished at a cost of $77,000, and an additional $57,000 was paid to clear and grade the land. Construction of a new building began on May 1 and was completed on October 29. Construction expenditures were as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)San Antonio borrowed $4,100,000 at 8%…
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