On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,700,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $6,000,000, 14% bonds $4,000,000, 9% long-term note Construction expenditures incurred during 2024 were as follows: January 1 March 31 June 30 September 30 December 31 Required: $ 620,000 1,220,000 824,000 620,000 420,000 Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date January 1 March 31 June 30 Expenditure Weight Average X X X September 30 X December 31 Accumulated expenditure $ 0 = $ Amount Interest Rate Capitalized Interest Average accumulated expenditures S 0 X % = $ x % = S 0 0
On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $1,700,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $6,000,000, 14% bonds $4,000,000, 9% long-term note Construction expenditures incurred during 2024 were as follows: January 1 March 31 June 30 September 30 December 31 Required: $ 620,000 1,220,000 824,000 620,000 420,000 Calculate the amount of interest capitalized for 2024 using the specific interest method. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date January 1 March 31 June 30 Expenditure Weight Average X X X September 30 X December 31 Accumulated expenditure $ 0 = $ Amount Interest Rate Capitalized Interest Average accumulated expenditures S 0 X % = $ x % = S 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Alpesh
Transcribed Image Text:On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was
completed in 2025. The company borrowed $1,700,000 at 9% on January 1 to help finance the construction. In addition to the
construction loan, Highlands had the following debt outstanding throughout 2024:
$6,000,000, 14% bonds
$4,000,000, 9% long-term note
Construction expenditures incurred during 2024 were as follows:
January 1
March 31
June 30
September 30
December 31
Required:
$ 620,000
1,220,000
824,000
620,000
420,000
Calculate the amount of interest capitalized for 2024 using the specific interest method.
Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered
as 12.3%).
Date
January 1
March 31
June 30
Expenditure
Weight
Average
X
X
X
September 30
X
December 31
Accumulated expenditure
$
0
=
$
Amount
Interest
Rate
Capitalized
Interest
Average accumulated expenditures
S
0
X
%
=
$
x
%
=
S
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education