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 $ 240,000 $ 348,000 $ 348,000 $ 348,000 $ 240,000 The company borrowed $766,000 on a construction loan at 8% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,580,000 in 8% bonds payable outstanding in 2024 and 2025. Average accumulated expenditures for 2024 was:

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 $ 240,000 $ 348,000 $ 348,000 $ 348,000 $ 240,000 The company borrowed $766,000 on a construction loan at 8% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,580,000 in 8% bonds payable outstanding in 2024 and 2025. Average accumulated expenditures for 2024 was:

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

See similar textbooks

Similar questions

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 $ 280,000 September 1, 2024 $ 360,000 December 31, 2024 $360,000 March 31, 2025 $ 360,000 September 30, 2025 $ 280,000 The company borrowed $770,000 on a construction loan at 10% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,600,000 in 10% bonds payable outstanding in 2024 and 2025. Interest (using the specific interest method) capitalized for 2025 was: Multiple Choice A) $57,750. B) $97,070. C ) $113,820. D) $96,000.
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 $ 200,000 September 1, 2024 $ 300,000 December 31, 2024 $ 300,000 March 31, 2025 $ 300,000 September 30, 2025 $ 200,000 The company borrowed $750,000 on a construction loan at 12% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,500,000 in 9% bonds payable outstanding in 2024 and 2025. Interest (using the specific interest method) capitalized for 2025 was: $86,805. $87,875. $67,500. $104,625. PLEASE DO NOT GIVE SOLUTION IN IMAGE FORMAT
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 $ 240,000 September 1, 2024 $ 350,000 December 31, 2024 $ 350,000 March 31, 2025 $ 360,000 September 30, 2025 $ 250,000 The company borrowed $760, 000 on a construction loan at 10% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,600,000 in 7% bonds payable outstanding in 2024 and 2025. Average accumulated expenditures for 2025 was:
Domestic
Domestic
On January 1, 2024, Grinch Inc. 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 $200,000 September 1, 2024 $300,000 December 31, 2024 $300,000 March 31, 2025 $300,000 September 30, 2025 $200,000 Grinch borrowed $750,000 at 12% interest on January 1, 2024 to be used specifically for the construction of the asset. This loan was outstanding throughout the construction period. The company also had $4,500,000 in 9% bonds outstanding in 2024 and 2025. The company uses the specific interest method to capitalize interest, and their year ends on December 31st. Interest expense reported by Grinch Inc. on its 2024 income statement was: $495,000 $459,000 $405,000 $90,000
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 235,000 September 1, 2021 $ 342,000 December 31, 2021 $ 342,000 March 31, 2022 $ 342,000 September 30, 2022 $ 235,000 Kendall borrowed $764,000 on a construction loan at 7% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,570,000 in 7% bonds payable outstanding in 2021 and 2022.Average accumulated expenditures for 2021 was: Multiple Choice $349,000. $399,000. $577,000. $470,000.
On January 2, 2025, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2026. Expenditures for the construction were as follows: January 2, 2025 September 1, 2025 December 31, 2025 March 31, 2026 September 30, 2026 $ 600000 1800000 1800000 O $391500 O $270000 O $94500 O $297000 1800000 1200000 Indian River Groves borrowed $3300000 on a construction loan at 12% interest on January 2, 2025. This loan was outstanding during the construction period. The company also had $12000000 in 9% bonds outstanding in 2025 and 2026. The interest capitalized for 2026 was:
Manji
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 266,000 September 1, 2021 $ 345,000 December 31, 2021 $ 345,000 March 31, 2022 $ 345,000 September 30, 2022 $ 266,000 Kendall borrowed $670,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $3,850,000 in 8% bonds payable outstanding in 2021 and 2022.What was the interest (using the specific interest method) capitalized for 2022?
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 320,000 September 1, 2021 $ 390,000 December 31, 2021 $ 390,000 March 31, 2022 $ 390,000 September 30, 2022 $ 320,000 Kendall borrowed $780,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,650,000 in 12% bonds payable outstanding in 2021 and 2022. Interest (using the specific interest method) capitalized for 2022 was:A. $126,315. B. $108,495. C. $109,565. D. $52,650.
On January 1, 2024, a company began construction of a new warehouse. The building was finished and ready for use on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 $ 323,000 September 1, 2024 $ 483,000 December 31, 2024 $ 483,000 March 31, 2025 $ 483,000 September 30, 2025 $ 323,000 The company had $6,100,000 in 15% bonds outstanding through both years. Capitalized interest in 2024 was: Multiple Choice $84,712. $48,450. $72,600. $96,900.