On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows: January 2, 2016 P200,000 September 1, 2016 600,000 December 31, 2016 600,000 March 31, 2017 600,000 September 30, 2017 400,000 Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017. The interest capitalized for 2017 was: Select one: a. P118,305 b. P124,740 c. P99,000
On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows: January 2, 2016 P200,000 September 1, 2016 600,000 December 31, 2016 600,000 March 31, 2017 600,000 September 30, 2017 400,000 Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017. The interest capitalized for 2017 was: Select one: a. P118,305 b. P124,740 c. P99,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows:
January 2, 2016 P200,000
September 1, 2016 600,000
December 31, 2016 600,000
March 31, 2017 600,000
September 30, 2017 400,000
Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017.
The interest capitalized for 2017 was:
January 2, 2016 P200,000
September 1, 2016 600,000
December 31, 2016 600,000
March 31, 2017 600,000
September 30, 2017 400,000
Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017.
The interest capitalized for 2017 was:
Select one:
a. P118,305
b. P124,740
c. P99,000
d. P25,740
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