On January 1, 2023, the Balmond Company began construction of a building to be used as its office headquarters. The building was completed on December 31, 2024. Expenditures on the project were as follows: Expenditures for 2023 Expenditures for 2024 January 3 1,000,000 January 31 300,000 March 31 1,200,000 March 31 500,000 June 30 800,000 May 31 600,000 October 1 600.000 Florida had the following borrowings during 2023. The borrowings were made for specific and general purposes but the proceeds were used in part to finance the construction of a new building: Florida had the following borrowings during 2023. The borrowings were made for specific and general purposes but the proceeds were used in part to finance the construction of a new building: Principal Annual interest 12% Construction loan 2,000,000 240,000 7.6% Long-term note 5,000,000 380,000 6% Mortgage payable 3,000,000 180,000 All debts were outstanding during all of 2023 and 2024. The total interest expense at the end of December 31, 2023 is:

On January 1, 2023, the Balmond Company began construction of a building to be used as its office headquarters. The building was completed on December 31, 2024. Expenditures on the project were as follows: Expenditures for 2023 Expenditures for 2024 January 3 1,000,000 January 31 300,000 March 31 1,200,000 March 31 500,000 June 30 800,000 May 31 600,000 October 1 600.000 Florida had the following borrowings during 2023. The borrowings were made for specific and general purposes but the proceeds were used in part to finance the construction of a new building: Florida had the following borrowings during 2023. The borrowings were made for specific and general purposes but the proceeds were used in part to finance the construction of a new building: Principal Annual interest 12% Construction loan 2,000,000 240,000 7.6% Long-term note 5,000,000 380,000 6% Mortgage payable 3,000,000 180,000 All debts were outstanding during all of 2023 and 2024. The total interest expense at the end of December 31, 2023 is:

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 29P

See similar textbooks

Similar questions

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 $ 1,040,000March 1, 2024 810,000June 30, 2024 450,000October 1, 2024 700,000January 31, 2025 1,125,000April 30, 2025 1,440,000August 31, 2025 2,610,000On 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 $5,900,000 and $7,900,000 with interest rates of 7% and 9%, 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…
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as itsoffice headquarters. The building was completed on September 30, 2019. Expenditures on the project were asfollows:January 1, 2018 $1,000,000March 1, 2018 600,000June 30, 2018 800,000October 1, 2018 600,000January 31, 2019 270,000April 30, 2019 585,000August 31, 2019 900,000On January 1, 2018, the company obtained a $3 million construction loan with a 10% interest rate. The loanwas outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-termnotes of $4,000,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end isDecember 31.Required:1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interestmethod.2. What is the total cost of the building?3. Calculate the amount of…
On January 1, 2021, Company A began the construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: Company A January 1, 2021 $2,000,000 March 1, 2021 1,600,000 June 30, 2021 1,800,000 October 1, 2021 1,600,000 January 31, 2022 1,270,000 April 30, 2022 1,585,000 August 31, 2022 1,900,000 Construction loan amount $4,000,000 Construction loan interest rate 8% Long-term note $5,000,000 Long-term note interest rate 4% Long-term note $7,000,000 Long-term note interest rate 6% On January 1, 2021, the company obtained a $4 million construction loan with a 8% interest rate. 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 4% and 6%, 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…
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 $ 1,710,000 March 1, 2024 1,320,000 June 30, 2024 1,520,000 October 1, 2024 1,320,000 January 31, 2025 378,000 April 30, 2025 711,000 August 31, 2025 1,008,000 On January 1, 2024, the company obtained a $4,200,000 construction loan with a 16% interest rate. 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 12% and 14%, 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 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 $ 1,850,000 March 1, 2024 1,500,000 June 30, 2024 1,700,000 October 1, 2024 1,500,000 January 31, 2025 405,000 April 30, 2025 738,000 August 31, 2025 1,035,000 On January 1, 2024, the company obtained a $4,500,000 construction loan with a 12% interest rate. The loan was outstanding all of 2024 and 2025. The company’s other interest-bearing debt included two long-term notes of $6,000,000 and $9,000,000 with interest rates of 8% and 10%, 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…
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,910,000 March 1, 2021 1,620,000 June 30, 2021 1,820,000 October 1, 2021 1,620,000 January 31, 2022 423,000 April 30, 2022 756,000 August 31, 2022 1,053,000 On January 1, 2021, the company obtained a $4,700,000 construction loan with a 12% interest rate. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $6,000,000 and $9,000,000 with interest rates of 8% and 10%, 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:1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the specific…
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,000,000 March 1, 2021 600,000 June 30, 2021 800,000 October 1, 2021 600,000 January 31, 2022 270,000 April 30, 2022 585,000 August 31, 2022 900,000 On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. The loan was outstanding all of 2021 and 2022. 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 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 capitalize in 2021 and 2022 using the specific interest…
On January 1, 2020, Sunland Company purchased land for an office site by paying $2680000 cash. Sunland began construction on the office building on January 1. The following expenditures were incurred for construction: Date Expenditures January 1, 2020 $ 1780000 April 1, 2020 2530000 May 1, 2020 4490000 June 1, 2020 4720000 The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $3650000 was borrowed on January 1, 2020 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2020 was a $1400000, 12%, 6-year note payable dated January 1, 2020. Assume the weighted-average accumulated expenditures for the construction project are $4300000. The amount of interest cost to be capitalized during 2020 is $441750. $387000. $496500. $406500...
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 $ 1,710,000 March 1, 2018 1,320,000 June 30, 2018 1,520,000 October 1, 2018 1,320,000 January 31, 2019 378,000 April 30, 2019 711,000 August 31, 2019 1,008,000 On January 1, 2018, the company obtained a $4,200,000 construction loan with a 16% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 12% and 14%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required:1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the…
On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 $ 1,710,000 March 1, 2018 1,320,000 June 30, 2018 1,520,000 October 1, 2018 1,320,000 January 31, 2019 378,000 April 30, 2019 711,000 August 31, 2019 1,008,000 On January 1, 2018, the company obtained a $4,200,000 construction loan with a 16% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 12% and 14%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end is December 31. Required:1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the…
Crane Company is constructing a building. Construction began in 2020 and the building was completed 12/31/20. Crane made payments to the construction company of $2982000 on 7/1, $6192000 on 9/1, and $5800000 on 12/31. Weighted-average accumulated expenditures were $14974000. $9174000. $3555000. $3039000.
A Company began a construction project on a building for P3,000,000. The projectwas completed during 2020. The accounting records disclosed the following:Description 2019 2020Progress billings during the year P1,100,000 P1,900,000Cost incurred during the year 900,000 1,800,000Collections on billings during the year 700,000 2,300,000Estimated cost to complete 1,800,000 What is the balance of construction in progress account at the end of 2020 usingovertime and point-in time method of recording revenue?