Exercise 10-24 (Algo) Interest capitalization [LO10-7]On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building wascompleted in 2022. The company borrowed $2,150,000 at 9% on January 1 to help finance the construction. In addition to theconstruction loan, Highlands had the following debt outstanding throughout 2021:$8,000,000, 14% bonds$2,000,000, 9% long-term noteConstruction expenditures incurred during 2021 were as follows:$ 880,0001,480,0001,136,000880,000680,000January 1March 31June 30September 30December 31Required: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 (i.e. 0.123 should be entered as 12.3%).)X Answer is not complete.DateExpenditureWeightAverageJanuary 12$880,00012/12$880,000March 311,480,000 x9/12 O =111,000 XJune 301,136,000 x6/12 O568,000000 00 Construction expenditures incurred during 2021 were as follows:January 1March 31000 0881,480,0001,136,000880,000680,000June 30September 30December 31Required: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 (i.e. 0.123 should be entered as 12.3%).)Answer is not complete.DateExpenditureWeightAverageJanuary 1$880,000 O x12/12 O =$880,000March 311,480,000 O x9/12111,000June 301,136,000 O x6/12 O568,000September 30880,0003/12 O220,000December 31680,0000/12 O=Accumulated expenditure$ 5,056,000$ 1,779,000CapitalizedInterestAmountInterest RateAverage accumulatedexpenditures$1,779,000Construction loan2,150,0000.All loans7.0 X %

Exercise 10-24 (Algo) Interest capitalization [L010-7] 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: $880,000 January 1 March 31 1,480,000 1,136,000 880,000 June 30 September 30 December 31 680,000 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculat Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) X Answer is not complete.

Exercise 10-24 (Algo) Interest capitalization [L010-7] 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: $880,000 January 1 March 31 1,480,000 1,136,000 880,000 June 30 September 30 December 31 680,000 Required: Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculat Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).) X Answer is not complete.

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 28CE

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