On June 1, 2023, a company began construction of a new manufacturing plant. The plant was completed on October 31, 2024. Expenditures on the project were as follows ($ in millions): July 1, 2023 88 October 1, 2023 56 February 1, 2024 64 April 1, 2024 38 September 1, 2024 37 October 1, 2024 23 On July 1, 2023, the company obtained a $104 million construction loan with a 8% interest rate. The loan was outstanding through the end of October, 2024. The company's only other interest - bearing debt was a long-term note for $100 million with an interest rate of 10%. This note was outstanding during all of 2023 and 2024. The company's fiscal year end is December 31. What is the amount of interest that should be capitalized in 2023, using the specific interest method? Multiple Choice $4.59 million S 4.64 million $5.65 million None of the other answer choices are correct

On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $26,000 each, and will be paid on December 31, 2021, 2022, and 2023. The last three are to be $41,000 each and will be paid on December 31, 2024, 2025, and 2026. Montgomery borrowed other money at a 12% annual rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)  Required:1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2021?2. How much interest expense on this note will Montgomery recognize in 2021?

On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 32 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025 August 31, 2025 On January 1, 2024, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2024 and 2025. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31. Required: Using the weighted-average interest method, answer the following questions: $ 1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 1.…

On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for MR Inc for a price of $20 million. During 2018, costs of $4 million were incurred with estimated costs of $12 million yet to be incurred. In 2019, costs incurred were $8 million with remaining costs estimated to be $5 million. The project was completed in 2020 after additional costs of $5.5 million were incurred. The company's fiscal year-end is December 31. Arrow recognizes revenue over time according to percentage-of-completion, and the bridge under construction is deemed to be under the control of MR Inc throughout the construction period. Compute the amount of revenue and gross profit or loss to be recognized by Arrow in 2018, 2019, and 2020.

On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:         January 1, 2021 $ 1,080,000   March 1, 2021   900,000   June 30, 2021   320,000   October 1, 2021   700,000   January 31, 2022   720,000   April 30, 2022   1,035,000   August 31, 2022   1,800,000      On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $5,000,000 and $7,000,000 with interest rates of 5% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required: Calculate the amount of interest that Mason should…

On December 31, 2023, Cheyenne Inc., a public company, borrowed $3 million at 11% payable annually to finance the construction of a new building. In 2024, the company made the following expenditures related to this building structure: March 1, $519,000; June 1, $630,000; July 1, $1.5 million (of which $412,000 was for the roof); December 1, $1.5 million (of which $728,000 was for the building HVAC). Additional information follows: 1. 2. 3. Other debt outstanding: $5-million, 10-year, 12% bond, dated December 31, 2016, with interest payable annually $1.5-million, six-year, 10% note, dated December 31, 2020, with interest payable annually The March 1, 2024 expenditure included land costs of $147,000. Interest revenue earned in 2024 on the unused idle construction loan amounted to $52,400. Determine the interest amount that could be capitalized in 2024 in relation to the building construction. (Do not round intermediate calculations. Round capitalization rate to 2 decimal places, e.g.…

On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 $ 1,820,000 March 1, 2024 1,440,000 June 30, 2024 1,640,000 October 1, 2024 1,440,000 January 31, 2025 396,000 April 30, 2025 729,000 August 31, 2025 1,026,000 On January 1, 2024, the company obtained a $4,400,000 construction loan with a 14% interest rate. The loan was outstanding all of 2024 and 2025. The company’s other interest-bearing debt included two long-term notes of $2,000,000 and $8,000,000 with interest rates of 10% and 12%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required: Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the specific interest method. What is the total cost of the building?…

On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 $ 609000 September 1, 2020 1802400 December 31, 2020 1802400 March 31, 2021 1802400 September 30, 2021 1203000 Bonita Industries borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13320000 in 9% bonds outstanding in 2020 and 2021.The interest capitalized for 2020 was: A)$505656 B)$108882 C)$145176 D)$289368

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

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