FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Recording Costs for Self Constructed Asset
Ameth Company constructed a building and incurred the following costs directly associated with construction. The building is valued at $155,000 (fair value) upon completion.
Materials
$50,000
80,000
Labor
30,000
5,000
2,000
$167,000
Incremental overhead
Interest on construction loan incurred before completion
Interest on construction loan incurred after completion
Total
Prepare summary journal entries to record costs of (1) construction and (2) completion of the building. Assume that all qualifying interest during the current year is capitalized t
Account Name
Dr.
Cr.
155,000
Building
To record the costs of construction
building
interest Expense
To record the completion of the building.
155,000
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Transcribed Image Text:Recording Costs for Self Constructed Asset Ameth Company constructed a building and incurred the following costs directly associated with construction. The building is valued at $155,000 (fair value) upon completion. Materials $50,000 80,000 Labor 30,000 5,000 2,000 $167,000 Incremental overhead Interest on construction loan incurred before completion Interest on construction loan incurred after completion Total Prepare summary journal entries to record costs of (1) construction and (2) completion of the building. Assume that all qualifying interest during the current year is capitalized t Account Name Dr. Cr. 155,000 Building To record the costs of construction building interest Expense To record the completion of the building. 155,000
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