1. Princes Inc. contracted P&P Company to construct a building for $1, 400.000n a Landcosting $100,000 (purchased from the contractor and included in the first payment)Princess Inc. made the following payments to the construction Company during 2012.Jan 1$210,000MarchMayDecTotal$300,00$540,00$450,000$1,500,000Specific Construction Debt15% 3-year note to finance purchase of land and building dated Dec. 31, 2011 with interestpayable annually on Dec. 31Other Debts10%, 5 year note payable with interest payable annually on Dec. 3112%, 10 year bonds with interest payable annually on Dec. 31

**1. Construction Contract and Cost Allocation:** - Princess Inc. entered into a construction…

Answered: 1. Princes Inc. contracted P&P Company…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 45P

See similar textbooks

Similar questions

Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following transactions: Paid shipping of $1,000 Paid installation fees of $2,000 Pays annual maintenance cost of $200 Received a 5% discount on $25,000 sales price Determine the acquisition cost of the equipment.
Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.
Johnson, Incorporated had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Purchased a copyright for $5,000 cash Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for major repairs If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?
On January 1, 20x1, Entity A obtained a 12%, ₱6,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of ₱180,000. The construction was completed on December 31, 20x1. How much borrowing costs are capitalized to the cost of the constructed building? 540,000 3. 720,000 480,000 4. 0
On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of ₱180,000. The construction was completed on December 31, 20x1 for total construction costs of ₱7,000,000. How much is the cost of the building on initial recognition? * A. 7,320,000 B. 7,500,000 C. 6,680,000 D. 7,000,000
Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2013-December 31, 2014Expenditures on project (incurred evenly): 2013 $30,0002014 $50,000Amounts borrowed and outstanding (all debt incurred January 1, 2013) $10,000 at 10% (specifically for the construction project)$18,000 at 11% (general debt)$30,000 at 13% (general debt) What is the amount of interest that should be capitalized in 2014?a. $6,400b. $6,600c. $6,710d. $6,910
Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2013-December 31, 2014Expenditures on project (incurred evenly): 2013 $30,0002014 $50,000Amounts borrowed and outstanding (all debt incurred January 1, 2013) $10,000 at 10% (specifically for the construction project)$18,000 at 11% (general debt)$30,000 at 13% (general debt) What is the amount of interest that should be capitalized in 2013?a. $1,000b. $1,500c. $1,612.50d. $1,812.50 What is the amount of interest that should be capitalized in 2014?a. $6,400b. $6,600c. $6,710d. $6,910 Assume that in 2013 unused borrowed funds were invested and earned interest revenue amounting to $800. How much interest now should be capitalized to the asset account in 2013?a. $1,000b. $1,500c. $1,612.50d. $1,812.50
Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2013-December 31, 2014Expenditures on project (incurred evenly): 2013 $30,0002014 $50,000Amounts borrowed and outstanding (all debt incurred January 1, 2013) $10,000 at 10% (specifically for the construction project)$18,000 at 11% (general debt)$30,000 at 13% (general debt) Assume that in 2013 unused borrowed funds were invested and earned interest revenue amounting to $800. How much interest now should be capitalized to the asset account in 2013? a. $1,000b. $1,500c. $1,612.50d. $1,812.50
Grantner Industries had the following Undepreciated Capital Cost (UCC) balances as of January 1, 2021: Class 1 $412,900 Class 10 $210,000 You have been given the following information: Class 1: The January 1, 2021, UCC balance in class 1 includes a single building that was acquired in 2006 for $1,100,000: $400,000 allocated to land, with the remainder to building. On May 15, 2021, the building and the land were sold for $750,000, allocated as $400,000 to land with the remainder to building. Class 10: The January 1, 2021 UCC balance represents 4 vehicles. The capital cost totaled $310,000. The vehicles were sold for total proceeds of $225,000 on October 31, 2021. Required: Calculate the maximum Capital Cost Allowance (CCA) for the year ending December 31, 2021. Your answer should include the maximum that can be deducted for each CCA class. Also, indicate any amount of capital gains, recapture, or terminal loss that results.
On April 1, 2013, Archer Corporation purchased a new machine on a deferred payment basis. A down payment of $6,000 was made and six monthly installments of $4,000 each are to be made beginning on May 1, 2013. The cash equivalent price of the machine was $28,000. Archer incurred and paid installation costs amounting to $500. The amount to be capitalized as the cost of the machine is a. $28,000b. $22,600c. $28,500d. $24,600
2. In 2019, Eliza company constructed a new building at a cost of 45,000,000. The expenditures for the building which was finished late in 2017 were incurred evenly during the year. The entity had the following loans outstanding on December 31, 2019:· 10% note to finance specifically the construction, dated January 1, 2019, P15,000,000. The note is unpaid on December 31, 2019. Investments were made on the proceeds from the loan and income of 150,000 was realized in 2019.· 12% 10-year bonds issued at face amount on April 30, 2018, 45,000,000.· 8% 5-year note payable, dated March 1, 2018, 15,000,000.What is the capitalizable borrowing cost?
On 1 January 20X5 a company purchased some plant. The invoice showed $ Cost of plant 48,000 Delivery to factory 300 One year warranty covering breakdown during 20X5 1000 Modifications to the factory building costing $2,200 were necessary to enable the plant to be installed. it has depreciated on the straight line basis at 10% per year, with a proportionate charge in the years of acquisition and disposal what is the figure for carrying amount of plant in the company statement of financial position as at 31 October 20X5

SEE MORE QUESTIONS

Recommended textbooks for you

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

SEE MORE TEXTBOOKS