On July 31, 2025, Sheridan Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Sheridan issued a $296,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31 $190,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Sheridan made a final $106,000 payment to Minsk. Other than the note to Netherlands, Sheridan's only outstanding liability at December 31, 2025, is a $31,800, 8%, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Your answer is correct. Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted average accumulated expenditures Avoidable interest Interest capitalized 47600 5712 5712
On July 31, 2025, Sheridan Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Sheridan issued a $296,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31 $190,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Sheridan made a final $106,000 payment to Minsk. Other than the note to Netherlands, Sheridan's only outstanding liability at December 31, 2025, is a $31,800, 8%, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Your answer is correct. Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted average accumulated expenditures Avoidable interest Interest capitalized 47600 5712 5712
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 9RE: Dexter Construction Corporation is building a student condominium complex; it started construction...
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