. Question 7. PINAUTANG started constructing a building for its own use in March1, 2020. PINAUTANG provided the following information related to theconstruction:Outstanding loans of the Company at January 1, 2020:Interest Rate5%10%TotalAmount of loanP10,000,00020,000,000P30,000,000March 1, 2020May 31, 2020July 1, 2020November 31,2020December 31, 2020Interest CostOn January 1, 2020, PINAUTANG also borrowed P3,000,000 at 15% per annum,to specifically fund its expected construction on March 1, 2020.P1,000,0008,000,0007,000,0004,000,0001,000,000P 500,0002,000,000P2,500,000February 1, 2021March 31, 2021P3,000,0002,000,000How much is the total cost of the constructed asset as of December 31, 2020?Group of answer choicesA. 23,950,000B. 22,133,060C. 21,944,217D. 22,152,467

INTRODUCTION: Total cost is the total cost of manufacturing that includes both fixed and variable…

Question 7. PINAUTANG started constructing a building for its own use in March 1, 2020. PINAUTANG provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Rate 5% 10% Total March 1, 2020 May 31, 2020 July 1, 2020 November 31,2020 December 31, 2020 Amount of loan P10,000,000 20,000,000 P30,000,000 C. 21,944,217 D. 22,152,467 On January 1, 2020, PINAUTANG also borrowed P3,000,000 at 15% per annum, to specifically fund its expected construction on March 1, 2020. P1,000,000 8,000,000 7,000,000 Interest Cost 4,000,000 1,000,000 P 500,000 2,000,000 P2,500,000 February 1, 2021 March 31, 2021 P3,000,00 2,000,000 How much is the total cost of the constructed asset as of December 31, 2020? Group of answer choices A. 23,950,000 B. 22,133,060

Question 7. PINAUTANG started constructing a building for its own use in March 1, 2020. PINAUTANG provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Rate 5% 10% Total March 1, 2020 May 31, 2020 July 1, 2020 November 31,2020 December 31, 2020 Amount of loan P10,000,000 20,000,000 P30,000,000 C. 21,944,217 D. 22,152,467 On January 1, 2020, PINAUTANG also borrowed P3,000,000 at 15% per annum, to specifically fund its expected construction on March 1, 2020. P1,000,000 8,000,000 7,000,000 Interest Cost 4,000,000 1,000,000 P 500,000 2,000,000 P2,500,000 February 1, 2021 March 31, 2021 P3,000,00 2,000,000 How much is the total cost of the constructed asset as of December 31, 2020? Group of answer choices A. 23,950,000 B. 22,133,060

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.16E

See similar textbooks

Similar questions

Future Values and Long-Term Investments Portman Corporation engaged in the following transactions during 2020: a. On January 1, 2020, Portman deposited $12,000 in a certificate of deposit paying 6% interest compounded semiannually (3% per 6-month period). The certificate will mature on December 31, 2023 b. On January 1, 2020, Portman established an account with Lee County Bank. Portman will make quarterly payments of $2,500 to Lee beginning on March 31, 2020, and ending on December 31, 2021. Lee guarantees an interest rate of 8% compounded quarterly (2% per 3-month period). Required: 1. Prepare the cash flow diagram for each of these two investments. 2. Calculate the amount to which each of these investments will accumulate at maturity. (Note: Round answers to two decimal places.)
LO.2 Oak Corporation has the following general business credit carryovers. If the general business credit generated by activities during 2019 equals 36,000 and the total credit allowed during the current year is 60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2019 income tax liability? What is the amount of unused credit carried forward to 2020?
Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) A. Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. B. Compute the principal due in year 1.
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
On May 1, 2019, a company purchased a new machine that it does not have to pay for until May 1, 2021. The total payment on May 1,2021, will include both principal and interest. Assuming interest at a 10% rate, the cost of the machine would be the total payment multiplied by what time value of money concept? a. future value of annuity of 1 b. future value of 1 c. present value of annuity of 1 d. present value of 1
Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.
Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On November 6, Pickles borrows $820,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in six months from November 6, and annual interest rate of 3%. B. On December 12, Pickles borrows an additional $200,000 with payment due in three months from December 12, and an annual interest rate of 10%. C. Pickles pays its accounts in full on March 12, for the December 12 loan, and on May 6 for the November 6 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Pickles.
Short-Term Debt Expected to Be Refinanced On December 31, 2019, Atwood Table Company has 8 million of short-term notes payable owed to City National Bank. On February 1, 2020, Atwood negotiates a revolving credit agreement providing for unrestricted borrowings up to 6 million. Borrowings will bear interest at 1% over the prevailing prime rate, will have stated maturities of 120 days, and will be continuously renewable for 120-day periods for 4 years. Atwood plans to refinance as much as possible of the notes outstanding with the proceeds available from this agreement. Assume that Atwoods December 31, 2019, year-end financial statements are issued on March 30, 2020. Required: Prepare a partial December 31, 2019, balance sheet for Atwood showing how the 8 million short-term debt should be reported. Next Level What is the justification for allowing short-term debt that is expected to be refinanced to be classified as a long-term liability.
Comprehensive Notes Receivable On January 1, 2019, Seaver Company sold land with a book value of 23,000 to Bench Company. Bench paid 15,000 down and signed a 15,000 non-interest-bearing note, payable in two 7,500 annual installments on December 31, 2019, and 2020. Neither the fair value of the land nor of the note is determinable. Benchs incremental borrowing rate is 12%. Later in the year, on July 1, 2019, Seaver sold a building to Hane Company, accepting a 2-year, 100,000 non-interest-bearing note due July 1, 2021. The fair value of the building was 82,644.00 on the date of the sale. The building had been purchased at a cost of 90,000 on January 1, 2014, and had a book value of 67,500 on December 31, 2018. It was being depreciated on a straight-line basis (no residual value) over a 20-year life. Required: 1. Prepare all the journal entries on Seavers books for January 1, 2019, through December 31, 2020, in regard to the Bench note. 2. Prepare all the journal entries on Seavers books for July 1, 2019, through July 1, 2021, in regard to the Hane note. 3. Prepare the notes receivable portion of Seavers balance sheet on December 31, 2019 and 2020.
Note Payable and Accrued Interest Ellsworth Enterprises borrowed $425,000 on an 8%, interest-bearing note on September 30, 2020. Ellsworth ends its fiscal year on December 31. The note was paid with interest on March 31, 2021. Required: 1. Prepare the entry for this note on September 30, 2020. 2. Prepare the adjusting entry for this note on December 31, 2020. 3. Indicate how the note and the accrued interest would appear on the balance sheet at December 31, 2020. 4. Prepare the entry to record the repayment of the note on March 31, 2021.
PINAUTANG started constructing a building for its own use in January 1, 2020. PINAUTANG provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Interest Rate Amount of loan Cost 15% P10,000,000 P 1,500,000 5% 30,000,000 1.500.000 Total P40,000,000 P3.000.000 On January 1, 2020, PINAUTANG also borrowed P5,000,000 at 12% per annum, to specifically fund its expected construction on March 1, 2020. January 1, 2020 P1,000,000 May 31, 2020 3,000,000 July 1, 2020 8.000.000 November 31.2020 6.000.000 December 31. 2020 2.000.000 How much is the total cost of the constructed asset as of December 31,2020? The amount of interest expense taken to profit or loss for 2020 is?
PINAUTANG started constructing a building for its own use in March 1, 2020. PINAUTANG provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Rate Amount of loan interestCost 5% P10,000,000 P 500,000 10% 20.000.000 2,000,000 Total P30,000,000 P2,500,000 On January 1, 2020, PINAUTANG also borrowed P3,000,000 at 15% per annum, to specifically fund its expected construction on March 1, 2020. March 1, 2020 P1,000,000 February 1, 2021 P3,000,000 May 31, 2020 8,000,000 March 31, 2021 2,000,000 July 1, 2020. 7.000.000 November 31, 2020 4.000.000 December 31, 2020 1,000,000 How much is the total cost of the constructed asset as of December 31, 2020?