What amount of interest is capitalized for 2023?2,940,0004,200,0001,260,0001,200,000 What is the total cost of the building on December 31, 2023?16,260,00010,260,00010,385,00016,385,000 What amount is recognized as interest expense for 2023?4,500,0004,200,0002,940,0003,240,000 On January 1, 2023, Florida Company purchased a tract of land with an old building which was razed shortly afteracquisition. The costs incurred in connection with the acquisition were:Total purchase price (the old building has a fair value of P300,000) .Agent commission..Legal fees for the purchase contract.Guarantee insurance...Cost of razing the old building..Salvage value of the old building materials..Cost of relocating squatters on the land..3,000,000100,00050,00010,000150,00025,0005,000Florida had the following borrowings during 2023. The borrowings were made for general purposes but the proceedswere used in part to finance the construction of a new building:Principal10,000,00020,000,000Interest1,200,0003,000,00012% bank loan..15% long term loan..The construction began on January 1, 2023 and was completed on December 31, 2023. Expenditures on the buildingwere made as follows:January 1..June 30...December 31.. .5,000,0008,000,0002,000,000.......... ...............................................................................

Answer: The interest to be capitalized is the part of interest to be increased in total value of…

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Business

Accounting

What amount of interest is capitalized for 2023? 2,940,000 4,200,000 1,260,000 1,200,000

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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Question

What amount of interest is capitalized for 2023?

2,940,000

4,200,000

1,260,000

1,200,000

What is the total cost of the building on December 31, 2023?

16,260,000

10,260,000

10,385,000

16,385,000

What amount is recognized as interest expense for 2023?

4,500,000

4,200,000

2,940,000

3,240,000

On January 1, 2023, Florida Company purchased a tract of land with an old building which was razed shortly after
acquisition. The costs incurred in connection with the acquisition were:
Total purchase price (the old building has a fair value of P300,000) .
Agent commission..
Legal fees for the purchase contract.
Guarantee insurance...
Cost of razing the old building..
Salvage value of the old building materials..
Cost of relocating squatters on the land..
3,000,000
100,000
50,000
10,000
150,000
25,000
5,000
Florida had the following borrowings during 2023. The borrowings were made for general purposes but the proceeds
were used in part to finance the construction of a new building:
Principal
10,000,000
20,000,000
Interest
1,200,000
3,000,000
12% bank loan..
15% long term loan..
The construction began on January 1, 2023 and was completed on December 31, 2023. Expenditures on the building
were made as follows:
January 1..
June 30...
December 31.. .
5,000,000
8,000,000
2,000,000
.......... ............
......................................
.......
......................

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