Use the following to answer questions 20-24: Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $5,800,000 on March 1, $3,960,000 on June and $16,000,000 on December 1. Arlington Company borrowed S2,400,000 on January 1 on: 5-year, 11% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $4,800,000 note payable and an 14%, 4-year, $8,000,000 note payable. (Use two decimals. For example, 10.45% and $12,666.67) 20. What is the actual interest for Arlington Company? 21. What are the weighted-average accumulated expenditures? 22. What amount of interest should be charged to expense? 23. What is the avoidable interest for Arlington Company? 24. What is the weighted-average interest rate used for interest capitalization purposes? 25. When computing the amount of interest cost to be capitalized, the concept of "avoidable interegt" refers to ortion of total interest cost which wonld not have been incured if

Use the following to answer questions 20-24: Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $5,800,000 on March 1, $3,960,000 on June and $16,000,000 on December 1. Arlington Company borrowed S2,400,000 on January 1 on: 5-year, 11% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $4,800,000 note payable and an 14%, 4-year, $8,000,000 note payable. (Use two decimals. For example, 10.45% and $12,666.67) 20. What is the actual interest for Arlington Company? 21. What are the weighted-average accumulated expenditures? 22. What amount of interest should be charged to expense? 23. What is the avoidable interest for Arlington Company? 24. What is the weighted-average interest rate used for interest capitalization purposes? 25. When computing the amount of interest cost to be capitalized, the concept of "avoidable interegt" refers to ortion of total interest cost which wonld not have been incured if

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 8RE

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Johnson, Incorporated had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Purchased a copyright for $5,000 cash Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for major repairs If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?
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Bonita Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,896,000 on March 1, $1,296,000 on June 1, and $3,025,000 on December 31. Bonita Company borrowed $1,089,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,327,000 note payable and an 11%, 4-year, $3,795,000 note payable. Compute avoidable interest for Bonita Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $ Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Blossom Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,016,000 on March 1, $1,296,000 on June 1, and $3,041,650 on December 31.Blossom Company borrowed $1,115,400 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,469,300 note payable and an 10%, 4-year, $3,155,500 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.)