On January 1, 2025, Swifty, Inc. signed a fixed price contract to have Builder Associates construct a major plant facility at a cost of $4,471,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2025, to finance the construction cost, Swifty borrowed $4,471,000 payable in 10 annual installments of $447, 100, plus interest at the rate of 10%. During 2025, Swifty made deposits and progress payments totaling $1,676, 625 under the contract; the weighted - average amount of accumulated expenditures was $894, 200 for the year. The excess borrowed funds were invested in short-term securities, from which Swifty realized investment income of $265,300. What amount should Swifty report as capitalized interest at December 31, 2025?
On January 1, 2025, Swifty, Inc. signed a fixed price contract to have Builder Associates construct a major plant facility at a cost of $4,471,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2025, to finance the construction cost, Swifty borrowed $4,471,000 payable in 10 annual installments of $447, 100, plus interest at the rate of 10%. During 2025, Swifty made deposits and progress payments totaling $1,676, 625 under the contract; the weighted - average amount of accumulated expenditures was $894, 200 for the year. The excess borrowed funds were invested in short-term securities, from which Swifty realized investment income of $265,300. What amount should Swifty report as capitalized interest at December 31, 2025?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On January 1, 2025, Swifty, Inc. signed a fixed - price contract to have Builder Associates construct a major plant facility at a cost of $4,471,000. It was estimated that it would take 3 years to
complete the project. Also on January 1, 2025, to finance the construction cost, Swifty borrowed $4,471,000 payable in 10 annual installments of $447, 100, plus interest at the rate of 10% . During
2025, Swifty made deposits and progress payments totaling $1,676, 625 under the contract; the weighted average amount of accumulated expenditures was $894, 200 for the year. The excess
borrowed funds were invested in short-term securities, from which Swifty realized investment income of $265, 300. What amount should Swifty report as capitalized interest at December
31, 2025?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbdc9b21b-d71c-4cf6-b619-32e22bb50e87%2Ff9016e87-bbd6-4be4-9920-5b68c625e301%2Fhknac5h_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, 2025, Swifty, Inc. signed a fixed - price contract to have Builder Associates construct a major plant facility at a cost of $4,471,000. It was estimated that it would take 3 years to
complete the project. Also on January 1, 2025, to finance the construction cost, Swifty borrowed $4,471,000 payable in 10 annual installments of $447, 100, plus interest at the rate of 10% . During
2025, Swifty made deposits and progress payments totaling $1,676, 625 under the contract; the weighted average amount of accumulated expenditures was $894, 200 for the year. The excess
borrowed funds were invested in short-term securities, from which Swifty realized investment income of $265, 300. What amount should Swifty report as capitalized interest at December
31, 2025?
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