On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished andready for use on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 $ 280,000September 1, 2024 $ 360,000 December 31, 2024 $360,000 March 31, 2025 $ 360,000 September 30, 2025 $ 280,000The company borrowed $770,000 on a construction loan at 10% interest on January 1, 2024. This loan was outstandingthroughout the construction period. The company had $4,600,000 in 10% bonds payable outstanding in 2024 and2025. Interest (using the specific interest method) capitalized for 2025 was: Multiple Choice A) $57,750. B) $97,070. C) $113,820. D) $96,000.

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Answered: On January 1, 2024, a company began…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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11 On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 September 1, 2024 December 31, 2024 March 31, 2025 September 30, 2025 The company borrowed $790,000 on a construction loan at 8% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,700,000 in 8% bonds payable outstanding in 2024 and 2025. Average accumulated expenditures for 2024 was: Multiple Choice $440,000. $490,000 $720,000. $300,000 $ 420,000 $ 420,000 $ 420,000 $ 300,000 $600,000.
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8
On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025 August 31, 2025 $1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 On January 1, 2024, the company obtained a $3 million construction loan with a 10% interest rate. The loan was outstanding all of 2024 and 2025. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31. 4. Compute the cost to be allocated to the building in 2025 other than Capitalized Interest, Show your computation in the workpaper provided. 4. 1/31/2025 4/30/2025 8/31/2025…
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