Weighted Average Expenditures Construction loan at 12%, interest paid annually 10-year, 13% loan, interest paid annually 6-year, 10% loan, interest paid annually 1,525,000 1,000,000 4,000,000 1,600,000 A) What is the avoidable interest for Elf Hotels?

Weighted Average Expenditures Construction loan at 12%, interest paid annually 10-year, 13% loan, interest paid annually 6-year, 10% loan, interest paid annually 1,525,000 1,000,000 4,000,000 1,600,000 A) What is the avoidable interest for Elf Hotels?

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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Ali Inc. is a manufacturer of custom furniture, which was incorporated on January 3, 2019. The following transactions happened during the year ended December 31, 2019. 1 On January 3rd, the owner invested $750,000 to start the business. On January 3rd, Ali signed a two-year lease contract to rent a building which will be used as the main manufacturing facility. The first and last month rent was paid in advance on Jan 3rd. Monthly rent is $5,000. On March 1, Ali purchased manufacturing equipment at a cost of $200,000. Ali paid $50,000 in cash and the rest will be paid next year. The equipment has a useful life of 8 years and $5,000 residual value. The company uses double declining balance method of depreciation. On April 1, Ali borrowed $350,000 from a bank. The loan is a 4-year with 4% interest rate. The interest is 4 payable on the first day of each month, beginning May 1st. On April 15, Ali purchased inventory of $150,000 from suppliers on account and is charged 13% harmonized sales…
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Michael Julius received an $18,000 payment in advance on a three-month contract to install a water purification system. By month-end the project is one-third completed. Determine the amount of revenue to be recognized in the current period.
Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain which will require special-order sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December 2012. Raw materials were requisitioned from the company's inventory on December 2 for $5,061; on December 8 for $1,059; and on December 14 for $3,459. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $16.50 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52. The predetermined overhead rate is based on machine hours. The…
Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December.Raw materials were requisitioned from the company’s inventory on December 2 for $5,091; on December 8 for $1,050; and on December 14 for $3,495. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52.Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $17.5 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52.The predetermined overhead rate is based on machine hours. The expected…
Oriole Construction Company began operations on January 1, 2025. During the year, Oriole Construction entered into a contract with Winds Corp. to construct a manufacturing facility. At that time, Oriole estimated that it would take 5 years to complete the facility at a total cost of $4.484,000. The total contract price for construction of the facility is $5,972,000. During the year, Oriole incurred $1,082,400 in construction costs related to the construction project. The estimated cost to complete the contract is $4,329,600. Winds Corp. was billed and paid 25% of the contract price. (a) Prepare schedules to compute the amount of gross profit to be recognized for the year ended December 31, 2025, and the amount to be shown as "costs and recognized profit in excess of billings" or "billings in excess of costs and recognized profit" at December 31, 2025, under each of the following methods. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses…
National Bank has several departments that occupy both floors of a two-story building. The departmental accounting system has a single account, Building Occupancy Cost, in its ledger. The types and amounts of occupancy costs recorded in this account for the current period follow. Depreciation—Building $ 18,000 Interest—Building mortgage 27,000 Taxes—Building and land 9,000 Gas (heating) expense 3,000 Lighting expense 3,000 Maintenance expense 6,000 Total occupancy cost $ 66,000 The building has 4,000 square feet on each floor. In prior periods, the accounting manager merely divided the $66,000 occupancy cost by 8,000 square feet to find an average cost of $8.25 per square foot and then charged each department a building occupancy cost equal to this rate times the number of square feet that it occupied. Diane Linder manages a first-floor department that occupies 1,000 square feet, and Juan Chiro manages a second-floor department that…
Crestfield leases office space. On January 3, the company incurs $26,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 5 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements?
Headland Company is constructing a building Construction began on February 1 and was completed on December 31 . Expenditures were $2,076,000 on March 1,$1,224,000 on June 1 and $3,076,600 on December 31. Headland Company borrowed $1,155,090 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%,5-year, $2,376,900 note payable and an 10%,4-year, $3,397,000 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, es. 7.58%.
Buildit Corp. was contracted to construct a building for $2,440,000. The contract provided for progress payments. Buildit's accounting year ends 31 December. Work began under the contract on 1 March 20X3, and was completed on 30 November 20X5. Construction activities are summarized below by year: 20x3 20x4 20X5 Construction coats incurred during the year, $610,000; estimated costs to complete, $1,110,000; progress billings during the year, $520,000; and collections, $430,000. Construction costs incurred during the year, $980,000; estimated costs to complete, $350,000; progress billing during the year, $1,690,000; and collections, $1,430,000. Construction costs incurred during the year, $330,000. Because the contract was completed, the remaining balance was billed and later collected in full per the contract. Required: 1. Prepare Buildit's journal entries to record these events. Assume that percentage of completion is measured by the ratio of costs incurred to date divided by total…