Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed on March 31, 2025. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $6,000,000, 5% note $9,000,000, 2% bonds Construction expenditures incurred were as follows: July 1, 2024 September 30, 2024 November 30, 2024 January 30, 2025 $ 800,000 1,200,000 1,200,000 1,140,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025. Answer is not complete. Complete this question by entering your answers in the tabs below. 2024 2025 Calculate the amount of interest capitalized for 2024. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date July 1, 2024 September 30, 2024 November 30, 2024 Accumulated expenditures Expenditure 800,000 X Weight 6/6 1,200,000 X 3/6 1,200,000 X 1/6 $ 3,200,000 Amount Average accumulated expenditures $ 1,600,000 x Interest Rate Portion of Year Outstanding Average $ 800,000 600,000 200,000 $ 1,600,000 Capitalized Interest % X 6/12 $ 2024 2025 > 0
Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed on March 31, 2025. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $6,000,000, 5% note $9,000,000, 2% bonds Construction expenditures incurred were as follows: July 1, 2024 September 30, 2024 November 30, 2024 January 30, 2025 $ 800,000 1,200,000 1,200,000 1,140,000 The company's fiscal year-end is December 31. Required: Calculate the amount of interest capitalized for 2024 and 2025. Answer is not complete. Complete this question by entering your answers in the tabs below. 2024 2025 Calculate the amount of interest capitalized for 2024. Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%). Date July 1, 2024 September 30, 2024 November 30, 2024 Accumulated expenditures Expenditure 800,000 X Weight 6/6 1,200,000 X 3/6 1,200,000 X 1/6 $ 3,200,000 Amount Average accumulated expenditures $ 1,600,000 x Interest Rate Portion of Year Outstanding Average $ 800,000 600,000 200,000 $ 1,600,000 Capitalized Interest % X 6/12 $ 2024 2025 > 0
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
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
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Transcribed Image Text:Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed on March 31, 2025. No new loans
were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout
the construction period:
$6,000,000, 5% note
$9,000,000, 2% bonds
Construction expenditures incurred were as follows:
July 1, 2024
September 30, 2024
November 30, 2024
January 30, 2025
$ 800,000
1,200,000
1,200,000
1,140,000
The company's fiscal year-end is December 31.
Required:
Calculate the amount of interest capitalized for 2024 and 2025.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
2024
2025
Calculate the amount of interest capitalized for 2024.
Note: Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).
Date
July 1, 2024
September 30, 2024
November 30, 2024
Accumulated expenditures
Expenditure
800,000 X
Weight
6/6
1,200,000 X
3/6
1,200,000
X
1/6
$ 3,200,000
Amount
Average accumulated expenditures
$ 1,600,000
x
Interest Rate
Portion of
Year
Outstanding
Average
$ 800,000
600,000
200,000
$ 1,600,000
Capitalized
Interest
%
X
6/12
$
2024
2025 >
0
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