per, 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) 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

per, 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) 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

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 15DQ

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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
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