was finished late in 2020 were incurred evenly during the a cost of P30,000,000. The expenditures for the building which During 2020, Elijah Company constructed a new building at 2. What is the interest expense for 2020? yеar. The entity had the following loans outstanding on December 31, 2020: 10% note to finance specifically the construction, dated January 1, 2020, P10,000,000. The note is unpaid on December 31, 2020, Investments were made on the proceeds from the loan and income of P100,000 was realized in 2020. • 12% 10-year bonds issued at face amount on April 30, 2019, P30,000,000. 8% 5-year note payable, dated March 1, 2019, P10,000,000. 1. What is the capitalizable borrowing cost? a. 1,550,000 b. 1,450,000 c. 1,400,000 d. 1,500,000 a. 4,400,000 b. 2,850,000 c. 3,850,000 d. 2,950,000

was finished late in 2020 were incurred evenly during the a cost of P30,000,000. The expenditures for the building which During 2020, Elijah Company constructed a new building at 2. What is the interest expense for 2020? yеar. The entity had the following loans outstanding on December 31, 2020: 10% note to finance specifically the construction, dated January 1, 2020, P10,000,000. The note is unpaid on December 31, 2020, Investments were made on the proceeds from the loan and income of P100,000 was realized in 2020. • 12% 10-year bonds issued at face amount on April 30, 2019, P30,000,000. 8% 5-year note payable, dated March 1, 2019, P10,000,000. 1. What is the capitalizable borrowing cost? a. 1,550,000 b. 1,450,000 c. 1,400,000 d. 1,500,000 a. 4,400,000 b. 2,850,000 c. 3,850,000 d. 2,950,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: January 1 $252,000 (includes cost of purchasing land of $150,000) May 1 310,000 July 1 420,000 October 31 276,000 In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year. 1. Compute the amount of interest capitalized related to the construction of the building. 2.If the expenditures are assumed to have been incurred evenly throughout the year:a. Compute weighted average accumulated expenditures b. Compute the amount of interest capitalized on the building
Blerghe started constructing a building for its own use on January 1, 2020. Blergh provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Rate Amount of loan Interest Cost 5% P10,000,000 P 500,000 10% 20,000,000 2,000,000 Total P30,000,000 P2,500,000 Construction expenditures: July 1, 2020 7,000,000 November 31,2020 3,000,000 December 31, 2020 1,000,000 The amount of borrowing cost that should be charged to profit or loss for the period is? a. 340,142 b. 2,208,450 c. 312,375 d. 2,187,625
On January 1, 2024, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2025. Construction expenditures for 2024, which were incurred evenly throughout the year, totaled $6,000,000. Marjlee had the following debt obligations which were outstanding during all of 2024: Construction loan, 11% Long-term note, 10% Long-term note, 7% Required: Calculate the amount of interest capitalized in 2024 for the building using the specific interest method. Interest capitalized $ 1,500,000 2,000,000 4,000,000 $ 255,000
am.103.
Jules Company started construction of a low-rise building for its own use on January 1, 2021. Upon completion at December 31, 2021, construction costs totaled P21,500,000, which were incurred evenly during the construction period. Prior to the start of construction, Jules Company obtained a P10M, 12%, 5-year loan from ABC Bank to finance the project. During periods that construction costs were low, the company temporarily investment the proceeds and earned interest income of P50,000. In addition to the specific borrowing, prior to the construction, the company had a general borrowing amounting to P600,000 with interest of 15% and a four-year term that was used in part in the self construction?How much is the capitalized interest on the self-constructed building of Jules Company?
Company A signed an agreement with a contractor to have a production facility built. The construction started on 01/01/2025 and continued until 08/31/2026. Company A borrowed a bank loan to be used in financing of the construction. The following information on Company A's bank loans is available: Annual Interest Date Borrowed Amount ($) Term Rate Specific Construction 01/01/2025 850,000 10 percent 2 years Loan Other Loan Other Loan 08/10/2024 450,000 12 percent 3 years 11/05/2023 750,000 13 percent 5 years Company A incurred the following costs during 2025: Expenditure Date Expenditure Amount ($) 01/01/2025 03/01/2025 07/01/2025 12/31/2025 600,000 720,000 540,000 330,000 The amount of interest cost to be capitalized in 2025 is approximately: $160,027 O $155,626 O $163,275 $152,215
Please help me
On 4/1/22, Little Inc. borrowed funds on a 9%, one-year note to finance the construction of a new building to be used for its own purposes. Construction on the project began on 5/1/22 and was completed on 9/1/22. Rounded to the nearest whole month, how many total months in 2022 should interest be capitalized under the interest capitalization rules? 0 months 4 months 5 months 8 months 9 months 12 months
Bonita Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6440000 on March 1, $5260000 on June 1, and $8850000 on December 31. Bonita Industries borrowed $3190000 on January 1 on a 5-year, 11% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 3-year, $6440000 note payable and an 10%, 4-year, $12650000 note payable.What are the weighted-average accumulated expenditures? $9860000 $20550000 $8435000 $11700000
Answwr only
What amount of interest is capitalized on December 31, 2020? A. P1,200,000 B. P1,000,000 C. P600,000 D. P400,000
Culver Inc. has a fiscal year ending April 30. On May 1, 2023, Culver borrowed $10 million at 11% to finance construction of its own building. Repayments of the loan are to begin the month after the building's completion. During the year ended April 30, 2024, expenditures for the partially completed structure totalled $7 million. These expenditures were incurred evenly throughout the year. Interest that was earned on the part of the loan that was not expended amounted to $482,000 for the year. For situation 3, how much should be shown as capitalized borrowing costs on Culver's financial statements at April 30, 2024? (If an answer is zero, please enter O. Do not leave any fields blank.) Capitalized borrowing $