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

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

FINANCIAL ACCOUNTING
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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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 .......... ............ ...................................... ....... ......................
Transcribed Image Text: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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