The following information is provided for Rodgers Inc. for a long-term construction project that is expected to be completed in the second quarter of 2021. The project is an addition to an existing stadium, which is a qualifying asset. Capital Expenditures for 2020 Date Amount Jan. 1, 2020 $900,000 Mar. 31, 2020 300,000 June 30, 2020 500,000 Dec. 31, 2020 500,000 Outstanding Debt in 2020 Debt Issuance Date Debt Amount Interest Ra Construction loan 1-Jan-20 $800,000 12% Note payable 1-Mar-19 600,000 12% Bond payable 1-Jan-15 150,000 8% Assume that Rodgers Inc. applies the weighted average method to capitalize interest. Required: 1. The weighted average accumulated expenditures (AAE) for 2020 is $ Round to the nearest dollar. 2. The amount of interest that actually incurred in 2020 is $ Round to the nearest dollar. 3. The amount of interest to be capitalized in 2020 is $ Round to the nearest dollar.
The following information is provided for Rodgers Inc. for a long-term construction project that is expected to be completed in the second quarter of 2021. The project is an addition to an existing stadium, which is a qualifying asset. Capital Expenditures for 2020 Date Amount Jan. 1, 2020 $900,000 Mar. 31, 2020 300,000 June 30, 2020 500,000 Dec. 31, 2020 500,000 Outstanding Debt in 2020 Debt Issuance Date Debt Amount Interest Ra Construction loan 1-Jan-20 $800,000 12% Note payable 1-Mar-19 600,000 12% Bond payable 1-Jan-15 150,000 8% Assume that Rodgers Inc. applies the weighted average method to capitalize interest. Required: 1. The weighted average accumulated expenditures (AAE) for 2020 is $ Round to the nearest dollar. 2. The amount of interest that actually incurred in 2020 is $ Round to the nearest dollar. 3. The amount of interest to be capitalized in 2020 is $ Round to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information is provided for Rodgers Inc. for a long-term construction project that is expected to be completed in the second quarter of 2021. The project is an addition to an existing stadium, which is a qualifying asset.
**Capital Expenditures for 2020:**
| Date | Amount |
|-------------|-----------|
| Jan. 1, 2020 | $900,000 |
| Mar. 31, 2020 | $300,000 |
| June 30, 2020 | $500,000 |
| Dec. 31, 2020 | $500,000 |
**Outstanding Debt in 2020:**
| Debt | Issuance Date | Debt Amount | Interest Rate |
|-------------------|---------------|-------------|---------------|
| Construction loan | 1-Jan-20 | $800,000 | 12% |
| Note payable | 1-Mar-19 | $600,000 | 12% |
| Bond payable | 1-Jan-15 | $150,000 | 8% |
Assume that Rodgers Inc. applies the weighted average method to capitalize interest.
**Required:**
1. The weighted average accumulated expenditures (AAE) for 2020 is $______. Round to the nearest dollar.
2. The amount of interest that actually incurred in 2020 is $______. Round to the nearest dollar.
3. The amount of interest to be capitalized in 2020 is $______. Round to the nearest dollar.
Transcribed Image Text:**Construction Expenditures in 2020**
- **Jan. 1, 2020**: $900,000
- **Mar. 31, 2020**: $300,000
- **June 30, 2020**: $500,000
- **Dec. 31, 2020**: $500,000
**Outstanding Debt in 2020**
| Debt | Issuance Date | Debt Amount | Interest Rate |
|--------------------|---------------|-------------|---------------|
| Construction loan | 1-Jan-20 | $800,000 | 12% |
| Note payable | 1-Mar-19 | $600,000 | 12% |
| Bond payable | 1-Jan-15 | $150,000 | 8% |
Assume that Rodgers Inc. applies the weighted average method to capitalize interest.
**Required:**
1. The weighted average accumulated expenditures (AAE) for 2020 is $______. Round to the nearest dollar.
2. The amount of interest that actually incurred in 2020 is $______. Round to the nearest dollar.
3. The amount of interest to be capitalized in 2020 is $______. Round to the nearest dollar.
4. The amount of interest to be expensed in 2020 is $______. Round to the nearest dollar.
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