On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: 12% bonds Long-term note, 8% Required: Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 1 $600,000 $1,200,000 $800,000 $600,000 $300,000 5,000,000 3,000,000 Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place.)

On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: 12% bonds Long-term note, 8% Required: Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 1 $600,000 $1,200,000 $800,000 $600,000 $300,000 5,000,000 3,000,000 Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $2,000,000, 8% note $8,000,000, 4% bonds Construction expenditures incurred were as follows: July 1, 2021 $ 400,000September 30, 2021 600,000November 30, 2021 600,000January 30, 2022 540,000 The company’s fiscal year-end is December 31.Required:Calculate the amount of interest capitalized for 2021 and 2022.
On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $2,200,000 at 8% on January 1 to help finance the construction in addition to the construction loan, Highlands had the following debt outstanding throughout 2024 $9,000,000, 10% bonds $6,000,000, 8% long-term note Construction expenditures incurred during 2024 were as follows January 1 March 31 June 30 September 30 December 31 Date $ 900,000 1,500,000 1,160,000 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method Note: Do not round the Intermediate calculations, Round your percentage answers to 1 decimal place (l.e. 0.123 should be entere es 12.3%). January 1 March 31 June 30 September 30 December 31 Accumulated expenditure 900,000 700,000 Expenditure $ Average accumulated expenditures S Amount 0 0 X x X X X x X Weight Interest Rate %6 % = = = = = Average S Capitalized…
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $8,000,000, 14% bonds $2,000,000, 9% long-term note Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 31 Date $ 880,000 1,480,000 1,136,000 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the Intermediate calculations. Round your percentage answers to 1 decimal place (l.e. 0.123 should be entered as 12.3%).) January 1 March 31 June 30 September 30 December 31 Accumulated expenditure 880,000 680,000 Average accumulated expenditures Expenditure Amount x x X X X X Weight Interest Rate %6 %6 = = = = = Average Capitalized Interest
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: $5,000,000, 12% bonds $3,000,000, 8% long-term note Construction expenditures incurred during 2021 were as follows:January 1 $ 600,000March 31 1,200,000June 30 800,000September 30 600,000December 31 400,000Required:Calculate the amount of interest capitalized for 2021 using the specific interest method.
Thornton Industries began construction of a warehouse on July 1, 2021. The project was completed on March 31, 2022. No new loans were required to fund construction. Thonton does have the following two interest-bearing liabilities that were outstanding throughout the construction perlod: $3,000, 000, 12% note $7,000, 000, 7X bonds Construction expenditures Incurred were as follows: July 1, 2021 Septenber 30, 2021 November 30, 2021 January 30, 2022 $ 700,000 990,000 990, 000 930,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitallized for 2021 and 2022. Complete this question by entering your answers in the tabs below. 2021 2022
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.
Thornton Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31,2019. No new loans were required to fund construction. Thornton does have the following two interest-bearingliabilities that were outstanding throughout the construction period:$2,000,000, 8% note$8,000,000, 4% bondsConstruction expenditures incurred were as follows:July 1, 2018 $400,000September 30, 2018 600,000November 30, 2018 600,000January 30, 2019 540,000The company’s fiscal year-end is December 31.Required:Calculate the amount of interest capitalized for 2018 and 2019.
On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use.The building was completed in 2019. The company borrowed $1,500,000 at 8% on January 1 to help finance theconstruction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018:$5,000,000, 12% bonds$3,000,000, 8% long-term noteConstruction expenditures incurred during 2018 were as follows:January 1 $ 600,000March 31 1,200,000June 30 800,000September 30 600,000December 31 400,000Required:Calculate the amount of interest capitalized for 2018 using the specific interest method.
X company started construction of a new office building for its own use at an estimated cost of $5 000 000 on January 1, 2022, and completed the construction on December 31, 2022. During the year of construction (2022) the company had outstanding the following debt obligations. i. Specific Construction Debt: $2 000 000 12% note issued December 31, 2021. Interest payable semiannually Other Debt: $1 400 000 10% short-term loan. Interest payable monthly and principal payable at maturity on May 30, 2023 $1 000 000 11% long-term loan. Interest payable on January 1 of each year and principal payable at maturity on January 1, 2025 Total expenditures - $5 200 000 Weighted average accumulated expenditures - $3 500 000 One of the accounting interns on the other team having reviewed the statement of financial position commented that it just did not make any sense… this ’avoidable interest’…. In reality, isn’t all interest unavoidable …. No one lends money without expecting to be compensated for…
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: $6,000,000, 5% note $9,000,000, 2% bonds Construction expenditures incurred were as follows: July 1, 2024 $ 800,000 September 30, 2024 1,200,000 1,200,000 1,140,000 November 30, 2024 January 30, 2025 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025. Answer is not complete. Complete this question by entering your answers in the tabs below. 2024 2025 Calculate the amount of interest capitalized for 2024. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date Expenditure Weight July 1, 2024 $ September 30, 2024 November 30, 2024 800,000 1,200,000 X…
On January 1, 2021, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The only interest-bearing debt the company had outstanding during 2021 was long-term bonds with a book value of $10,000,000 and an effective interest rate of 8%. Construction expenditures incurred during 2021 were as follows: January 1 $ 500,000March 1 600,000July 31 480,000September 30 600,000December 31 300,000 Required:Calculate the amount of interest capitalized for 2021.
Klutlan Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31, 2019. No new loans were required to fund construction. Klutlan does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $2,000,000, 8% note $8,000,000, 5% bonds Construction expenditures incurred were as follows: July 1, 2018 $520,000 September 30, 2018 600,000 November 30, 2018 600,000 January 30, 2019 540,000 The company's fiscal year-end is December 31. Question The total value of the warehouse at the end of construction would be: a $2,288,000 b $2,317,702 c $1,745,760 d $2,260,000