During 2004, Bell Corporation constructed assets costing P750,000. The weighted-average accumulated expenditures on these assets during 2004 was P450,000. To help pay for construction, P330,000 was borrowed at 10% on January 1, 2004, and funds not needed for construction were temporarily invested in short-term securities, yielding P7,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P375,000, 10-year, 9% note payable dated January 1, 1998. What is the amount of interest that should be capitalized by Bell during 2004? OP43,800 OP36,800 OP45,000 P22,500

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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During 2004, Bell Corporation constructed assets costing P750,000. The weighted-average accumulated
expenditures on these assets during 2004 was P450,000. To help pay for construction, P330,000 was
borrowed at 10% on January 1, 2004, and funds not needed for construction were temporarily invested in
short-term securities, yielding P7,000 in interest revenue. Other than the construction funds borrowed, the
only other debt outstanding during the year was a P375,000, 10-year, 9% note payable dated January 1,
1998. What is the amount of interest that should be capitalized by Bell during 2004?
O
P43,800
OP36,800
P45,000
OP22,500
Transcribed Image Text:During 2004, Bell Corporation constructed assets costing P750,000. The weighted-average accumulated expenditures on these assets during 2004 was P450,000. To help pay for construction, P330,000 was borrowed at 10% on January 1, 2004, and funds not needed for construction were temporarily invested in short-term securities, yielding P7,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P375,000, 10-year, 9% note payable dated January 1, 1998. What is the amount of interest that should be capitalized by Bell during 2004? O P43,800 OP36,800 P45,000 OP22,500
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