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

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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? P43,800 P36,800 P45,000 P22,500
Wakanda Company borrowed P4,000,000 on a 10% note payable to finance a new warehouse which the entity is constructing for own use.The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building.At the end of the current year, average accumulated expenditures on the new warehouse totaled P4,750,000. What amount of interest should be capitalized? A. P400,000 B. P475,000 C. P490,000 D. P522,500
During 2025, Crane Company constructed assets costing $4070000. The weighted-average accumulated expenditures on these assets during 2025 was $2410000. To help pay for construction, $1720000 was borrowed at 10% on January 1, 2025, and funds not needed for construction were temporarily invested in short-term securities, yielding $35000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $1970000, 10-year, 9% note payable dated January 1, 2019. Interest is payable on both notes at December 31, 2025. What is the amount of interest that should be capitalized by Crane during 2025? O $234100. O $241000. O $366300. O $120500.
During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated expenditures on these assets during 2020 was P18,000,0000. To help pay for construction, P13,200,000 was borrowed at 8% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding P250,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013. What is the amount of the interest capitalized for 2020?
During 2021, New Era Inc. constructed assets costing $1,000,000. The weighted-average accumulated expenditures on these assets during 2021 was $600,000. To help pay for construction, $440,000 was borrowed at 10% on January 1, 2021 , and funds not needed for construction were temporarily invested in short-term securities, yielding $9,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $500,000, 10-year, 9% note payable dated January 1, 2015. What is the amount of interest that should be capitalized by New Era Inc. during 2021? $
During 2020, Concord Corporation constructed assets costing $4060000. The weighted-average accumulated expenditures on these assets during 2020 was $2470000. To help pay for construction, $1710000 was borrowed at 11% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding $32000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $1900000, 10-year, 10% note payable dated January 1, 2014. What is the amount of interest that should be capitalized by Concord during 2020? O $135850. O $271700. O $264100. O $406000.
During 2022, Churchill Inc. constructed assets costing £4,200,000. The weighted- average accumulated expenditures on these assets the year was £2,600,000. Churchill took out a 7% construction loan of £4,000,000 on January 1, 2022, and funds not needed for construction were temporarily invested in short-term securities, yielding £30,000 in interest revenue. Other than the construction loan, the only other debt outstanding during the year was a £2,000,000, 5-year, 9% note payable dated January 1, 2018. What is the amount of interest that should be capitalized by Churchill during 2022? £152,000. £182,000. £280,000. £330,000. a. b. C. d.
Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed on March 31, 2025. No new loans were required to fund construction. Thornton does have the following two interest - bearing liabilities that were outstanding throughout the construction period:$4,000,000, 9% note$ 6,000,000, 6% bondsConstruction expenditures incurred were as follows:July 1, 2024$ 430, 000September 30, 2024630,000November 30, 2024630,000 January 30, 2025570,000 The companys fiscal year - end is December 31. Required:Calculate the amount of interest capitalized for 2024 and 2025.
During 2021, Tiktok Company constructed various assets. The weighted average expenditures for capitalization of interest during 2021 amounted to P 5,600,000. The entity had the following debt outstanding at December 31, 2021: • From BPI (specific borrowing), P 3,600,000, 10% • From BDO (general borrowing), P 4,000,000, 12% • From PNB (general borrowing), P 2,000,000, 9% QUESTION 1: What is the capitalized borrowing costs for the year ended December 31, 2021? I Select 1 QUESTION 2: What is the interest expense for the year ended December 31, 2021? I Select 1
During 2017, Egyptian Mau Company construct building costing P18,500,000. The weighted average accumulated expenditures on the building during 2017 totaled P7,800,000. The entity borrowed P4,000,000 at 7% on January 1, 2017. Funds not needed for construction were temporarily invested in short-term securities, and earned P120,000 interest revenue. In addition to the construction loan, the entity had two other notes outstanding during the year, P3,000,000, 10-year, 10% note payable dated October 1, 2015, and a 5-year P2,000,000, 8% note payable dated November 2, 2015. What amount of interest should be capitalized on December 31, 2017? A. 574,000 B. 620,000 C. 509,600 D. 629,600
On December 31, 2009, Hurston Inc. borrowed $4,000,000 at 10% payable annually to finance the construction of a new building. In 2010, the company made the following expenditures related to this building: March 1, $250,000; June 1, $500,000; July 1, $1,600,000; December 1, $1,100,000. Additional information is provided as follows. Other debt outstanding 10-year, 11.5 % bond, December 31, 2003, interest payable annually on $6,000, 000 6-year, 12.5 % note, dated December 31, 2007, interest payable annually on $5000, 000 March 1, 2010, expenditure included land costs of $150,000 Interest revenue earned in 2010 on funds related to specific borrowing $49,000 Instructions: Determine the amount of interest to be capitalized in 2010 in relation to the construction of the building.
During 2020, Glass Corporation constructed assets costing $1,000,000. The weighted- average accumulated expenditures on these assets during 2020 was $600,000. To help pay for construction, $440,000 was borrowed at 10% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding $9,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $500,000, 10-year, 9% note payable dated January 1, 2009. The amount of interest that should be capitalized by Glass during 2020 is $