The Slow company has started the construction of an asset on September 1, 2019 and finished it on November 1, 2020. The weighted average expenditure as calculated at the end of the construction in 2020 was: $725,456. In 2020, the comp had the following outstanding indirect debts: Debt One-year loan payable taken out on March 31, 2019 Two-year note payable Faken out on June 1, 2020 Amount $67,000 $120,000 Annual rate 5% 7% Assuming there is no direct debt related to this construction, the interest that will be capitalized on indirect debt in 2020 is (calculate ratios to 2 decimal places): a) $47,980 b) $45,130 Oc) $7,133
The Slow company has started the construction of an asset on September 1, 2019 and finished it on November 1, 2020. The weighted average expenditure as calculated at the end of the construction in 2020 was: $725,456. In 2020, the comp had the following outstanding indirect debts: Debt One-year loan payable taken out on March 31, 2019 Two-year note payable Faken out on June 1, 2020 Amount $67,000 $120,000 Annual rate 5% 7% Assuming there is no direct debt related to this construction, the interest that will be capitalized on indirect debt in 2020 is (calculate ratios to 2 decimal places): a) $47,980 b) $45,130 Oc) $7,133
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
ChapterM: Time Value Of Money Module
Section: Chapter Questions
Problem 5MC: On May 1, 2019, a company purchased a new machine that it does not have to pay for until May 1,...
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Question
The Slow company has started the construction of an asset on September 1, 2019
and finished it on November 1, 2020. The weighted average expenditure as
calculated at the end of the construction in 2020 was: $725,456. In 2020, the
comp had the following outstanding indirect debts:
Debt
One-year loan payable taken out on March 31, 2019
Two-year note payable Faken out on June 1, 2020
Amount
$67,000
$120,000
Annual rate
5%
7%
Assuming there is no direct debt related to this construction, the interest that will be
capitalized on indirect debt in 2020 is (calculate ratios to 2 decimal places):
a) $47,980
b) $45,130
Oc) $7,133
d) $5,737
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