Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2013-December 31, 2014 Expenditures on project (incurred evenly): 2013 $30,000 2014 $50,000 Amounts 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. $1,000 b. $1,500 c. $1,612.50 d. $1,812.50 What is the amount of interest that should be capitalized in 2014? a. $6,400 b. $6,600 c. $6,710 d. $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. $1,000 b. $1,500 c. $1,612.50 d. $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, 2014
Expenditures on project (incurred evenly):
2013 $30,000
2014 $50,000
Amounts 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. $1,000
b. $1,500
c. $1,612.50
d. $1,812.50
What is the amount of interest that should be capitalized in 2014?
a. $6,400
b. $6,600
c. $6,710
d. $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. $1,000
b. $1,500
c. $1,612.50
d. $1,812.50
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
