Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $3,000,000, 6% note $5,000,000, 2% bonds Construction expenditures incurred were as follows: July 1, 2021 September 30, 2021 November 30, 2021 January 30, 2022 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2021 and 2022. Complete this question by entering your answers in the tabs below. 2021 2022 $ 540,000 750,000 750,000 690,000 Calculate the amount of interest capitalized for 2021. (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 July 1, 2021 September 30, 2021 November 30, 2021 Accumulated expenditures Average accumulated expenditures Expenditure $ $ 540,000 X 750,000 x 750,000 X 2,040,000 Amount $ 1,040,000 x Weight Interest Rate < 2021 % 6/6 3/6 1/6 2022 = = = $ 540,000 375,000 125,000 $ 1,040,000 Average Capitalized Interest = $ 0
Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $3,000,000, 6% note $5,000,000, 2% bonds Construction expenditures incurred were as follows: July 1, 2021 September 30, 2021 November 30, 2021 January 30, 2022 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2021 and 2022. Complete this question by entering your answers in the tabs below. 2021 2022 $ 540,000 750,000 750,000 690,000 Calculate the amount of interest capitalized for 2021. (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 July 1, 2021 September 30, 2021 November 30, 2021 Accumulated expenditures Average accumulated expenditures Expenditure $ $ 540,000 X 750,000 x 750,000 X 2,040,000 Amount $ 1,040,000 x Weight Interest Rate < 2021 % 6/6 3/6 1/6 2022 = = = $ 540,000 375,000 125,000 $ 1,040,000 Average Capitalized Interest = $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans
were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout
the construction period:
$3,000,000, 6% note
$5,000,000, 2% bonds.
Construction expenditures incurred were as follows:
July 1, 2021
September 30, 2021
November 30, 2021
January 30, 2022
The company's fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2021 and 2022.
Complete this question by entering your answers in the tabs below.
2021
2022
$ 540,000
750,000
750,000
690,000
Calculate the amount of interest capitalized for 2021. (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
July 1, 2021
September 30, 2021
November 30, 2021
Accumulated expenditures
Average accumulated expenditures
Expenditure
$
540,000 X
750,000 X
750,000 X
$ 2,040,000
Amount
$ 1,040,000 X
Weight
Interest Rate
< 2021
%
6/6
3/6
1/6
2022 >
= $
=
$
Average
$
540,000
375,000
125,000
1,040,000
Capitalized
Interest
0
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