Vaughn Furniture started construction of a combination office and warehouse building for its own use at an estimated cost of €4,200,000 on January 1, 2022. Vaughn expected to complete the building by December 31, 2022. Vaughn has the following debt obligations outstanding during the construction period. Construction loan-8% interest, payable semiannually, issued December 31, 2021 Short-term loan-6% interest, payable monthly, and principal payable at maturity on May 30, 2023 Long-term loan-7% interest, payable on January 1 of each year. Principal payable on January 1, 2026 (a) Your Answer Correct Answer (Used) Assume that Vaughn completed the office and warehouse building on December 31, 2022, as planned at a total cost of €4,420,000. The following expenditures were made during the period forthis project: January 1, €850,000; April 1, €1,250,000; July 1, €1,650,000; and October 1, €560,000. Excess funds from the construction loans were invested during the period and earned €18,000 of investment income. Compute the amount of borrowing costs to be capitalized for this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.) Borrowing costs (b) Depreciation Expense €1,700,000 1,360,000 850,000 198,707 Compute the depreciation expense for the year ended December 31, 2023. Vaughn elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a residual value of €270,000. (Round answer to O decimal places, e.g. 5,275.) eTextbook and Media

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.