On July 31, 2025, Wildhorse Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Wildhorse issued a $284,400, 3-year, 10% note payable at Netherlands National Bank, on which interest is payable each July 31. $183,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 8% until November 1. On November 1, Wildhorse made a final $101,000 payment to Minsk. Other than the note to Netherlands, Wildhorse's only outstanding liability at December 31, 2025, is a $31,200, 6 %, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted-average accumulated expenditures Avoidable interest $ LA $ LA

On July 31, 2025, Wildhorse Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Wildhorse issued a $284,400, 3-year, 10% note payable at Netherlands National Bank, on which interest is payable each July 31. $183,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 8% until November 1. On November 1, Wildhorse made a final $101,000 payment to Minsk. Other than the note to Netherlands, Wildhorse's only outstanding liability at December 31, 2025, is a $31,200, 6 %, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted-average accumulated expenditures Avoidable interest $ LA $ LA

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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