INTERMEDIATE ACCOUNTING
3rd Edition
ISBN: 9780136946694
Author: GORDON
Publisher: RENT PEARS
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Question
Chapter 11, Problem 11.8E
a.
To determine
Weighted average accumulated expenditure for current year.
Given Information:
Amount of note payable is $2,800,000 with the interest of 5% and time period of 3 years.
Amount of 6% bond payable is $5,000,000.
Amount of 9% note payable is $1,000,000.
b.
To determine
The amount of avoidable interest and actual interest.
Given Information:
Amount of note payable is $2,800,000 with the interest of 5% and time period of 3 years.
Amount of 6% bond payable is $5,000,000.
Amount of 9% note payable is $1,000,000.
c.
To determine
The amount of interest to be capitalized and expensed during the year.
d.
To determine
To prepare: The
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An entity had the following loans outstanding during 20X1 and 20X2.Specific construction loan, 2,000,000 - 15%General loan, 15,000,000 - 12%The entity began the self-construction of a new building on January 1, 20X1 and the building was completed on December 31, 20X2. The following expenditures were made during 20X1 and 20X2: January 1, 20X1 - 2,000,000; July 1, 20X1 - 4,000,000; November 1, 20X1 - 3,000,000; July 1, 20X2 - 1,000,000. What is the Capitalizable Borrowing cost – 20X2
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A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for
construction were as follows: January 1, $640,000; March 31, $740,000; June 30, $540,000; October 30, $1,020,000. The company
arranged a 9% loan on January 1 for $980,000. Assume the $980,000 loan is not specifically tied to the construction of the building.
The company's other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest
rates of 11% and 8%, respectively.
Assuming the company uses the weighted-average method, calculate the amount of interest capitalized for the year.
Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage
answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%).
Date
January 1
March 31
June 30
October 30
Accumulated expenditures
Average accumulated expenditures
All loans
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Chapter 11 Solutions
INTERMEDIATE ACCOUNTING
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