7.A building was constructed last year for Agro Co. for use as a production facility.Construction began on January 1 and was completed on December 31. The payments to the contractorwere as follows.DatePayment1/1$600,0003/31700,0009/301,000,00011/1800,000To finance construction of the building, a $1,500,000, 12% construction loan was taken out on January 1.The loan was repaid on December 31. The firm had two sources of general debt: $800,000 note payable,8% annual interest, and $1,200,000 par value bonds, 10% annual interest.Determine the amount of interest to be capitalized

To determine the amount of interest to be capitalized for a construction project, we follow specific…

Answered: 7. A building was constructed last year…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Buildmore Construction limited received a contract for $6000000 in year 1 to build a parking complex for the federal government. The following data was accumulated during the construction period: Total costs to date year1 $1800 000,Year 2 $2090 000,Year 3 $5000 000;Estimated cost to complete Year 1 $2700 000,Year 2 $3410 000,Year 3 $0;Progress billings during year Year 1 $2000 000,Year 2 $2000 000,Year 3 $2000 000:Cash collected during year Year 1 $1500 000,Year 2 $2000 000,Year 3 $2500 000. Prepare journals
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Madrigal Company constructed a building for its own use. Construction started on January 3, 2021 and the building was completed on December 31, 2021. Costs incurred during the year were as follows: January 1-P400,000 April 1 - P500,000 August 1 - P480,000 December 1- P180,000 To help finance the construction of the building, the company obtained a two-year, 12% loan of P1,000,000. Prior to the disbursement of the loan proceeds, it was temporarily invested and earned interest income of P15,000. During the year 2021, the company has also general borrowings as follows: 10% Notes Payable, due March 1, 2023 - P1,000,000 12% Notes Payable, due Dec. 31, 2024-P1,500,000 How much interest is capitalized?
what is the amount of revenue to be recorded for the year by BUNNY is?
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, $680,000; March 31, $780,000; June 30, $580,000; October 30, $1,140,000. To help finance construction, the company arranged a 9% construction loan on January 1 for $1,060,000. 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 10% and 8%, respectively. Assuming the company uses the specific interest 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 Expenditure Amount X X X Weight Interest Rate % % "1 II = = Average…
On January 1, 20x6, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs 4,000,000 each (a total of 10 houses are to be constructed). Construction will take 2 years to complete. Payment terms are 50% by the end of the 1st year, 25% at the end of the 2nd year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6. Total cost of land- 2,000,000 Estimated total cost of construction - 25,000,000 (including the costs for the common areas, streets and light posts amounting to 5,000,000); Estimated total cost of contract for the 10 houses -…
18. On January 1, 2020 Ebasan Company took out a 12% P10,000,000 loan to finance the construction of a building. The key dates are as follows: Jan 1: Loan Interest relating to the project starts to be incurred Feb 1: Technical site planning commences Mar 1: Expenditures on the project start to be incurred Apr 1: Construction work commences Nov 1: Substantially all of the activities necessary to prepare the asset for its intended use are complete Dec 1: Building brought into use What amount of interest should Ebasan capitalize for the current year? A. 1,200,000 B. 1,000,000 C. 900,000 D. 800,000
At the end of Year 1, how much is the balance of the assets account Production-in-Progress if WW Guy uses the percentage of completion method? see the options in attached screenshot.
Whispering Ltd. is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were HK$ 1,470,000 on March 1, HK$984,000 on June 1, and HK$ 2,406,000 on December 31. Whispering Ltd. had outstanding all year a 12%, 5-year, HK$ 3,840,000 note payable and on 13 %, 4-year, HK$3,360,000 note payable. Determine the amount of borrowing cost that Whispering Ltd. would capitalize. Use the capitalization rate used for borrowing cost capitalization purpose
At the beginning of 2009, Florida Road Construction entered into a contract to build a road for the government. Construction will take four years. Th e following information as of 31 December 2009 is available for the contract: Total revenue according to contract $10,000,000 Total expected cost $ 8,000,000 Cost incurred during 2009 $ 1,200,000 Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2009? A . None.
Please walk me through problem.
The San Miguel Company self constructed an asset for its own use. Construction started on January 1, 2021 and the asset was completed on October 31, 2021. Costs incurred during the period of construction were as follows:January 1-P400,000 April 1-P500,000 August 1-P480,000October 1-P180,000 At the beginning of the year, the company obtained a two-year, 18% loan of P500,000, specifically to finance the asset construction. In addition to the specific borrowing, prior to the construction, San Miguel Company had a general borrowing amounting to P600,000 with interest of 15% and a five-year term that was used in part in the self construction.What is the total cost of the self constructed asset?

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