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 $1,550,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $9,000,000, 11% bonds $3,000,000, 7% long-term note Construction expenditures incurred during 2024 were as follows: January 1 March 31 June 30 September 30 December 31 Required: 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 $ 680,000 1,280,000 896,000 680,000 480,000 January 1 March 31 June 30 September 30 December 31 Accumulated expenditure Expenditure $ 0 X X X X X Weight Average $ 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 $1,550,000 at 7% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2024: $9,000,000, 11% bonds $3,000,000, 7% long-term note Construction expenditures incurred during 2024 were as follows: January 1 March 31 June 30 September 30 December 31 Required: 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 $ 680,000 1,280,000 896,000 680,000 480,000 January 1 March 31 June 30 September 30 December 31 Accumulated expenditure Expenditure $ 0 X X X X X Weight Average $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Do not give image format
Transcribed Image Text:January 1
March 31
June 30
Date
September 30
December 31
Accumulated expenditure
Average accumulated
expenditures
Expenditure
$
$
Amount
X
X
X
X
X
X
X
Weight
Interest Rate
%
%
=
11
11
=
11
=
=
=
=
=
Average
$
Capitalized
Interest
$
$
0
0
0
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 $1,550,000 at 7% on January 1 to help finance the construction. In addition to the
construction loan, Highlands had the following debt outstanding throughout 2024:
$9,000,000, 11% bonds
$3,000,000, 7% long-term note
Construction expenditures incurred during 2024 were as follows:
January 1
March 31
June 30
September 30
December 31
Required:
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%).
January 1
March 31
June 30
Date
$ 680,000
1,280,000
896,000
680,000
480,000
September 30
December 31
Accumulated expenditure
Expenditure
$
0
X
X
X
X
X
Weight
Average
$
0
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