INTERMEDIATE ACCOUNTING (LCPO)
10th Edition
ISBN: 9781264473441
Author: SPICELAND
Publisher: MCG
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INMACULATA TRUCKING., INC.
On April 1, 2020, Marie France organized a business called Inmaculata Trucking. Inc. During
April, the company entered into the following transactions:
Apr 1
Marie France deposited Php 500,000 cash in a bank account in the name of the business.
Purchased for Phr 250,000 a transportation equipmentto be used in the business.
Marie France paid 50% as down payment while the balance will be paid on May 15, 2020
Apr 1
Apr 1
Paid rental forthe month of April, Php 5,000
Apr 5
Earned and collected trucking income from Eva, Php 8,000
Apr 8
Earned trucking income from Julia, Php 30,000 on account and Julia will pay on May 8, 2020
Apr 10
Paid salaries of drivers, Php 10,000
Rented the vehicle to Joshua for Php 35,000, Joshua paid Php 20,000 on that date and
the balance on April 20
Apr 15
Apr 18
Paid electric bills for the month, Php 2,000
Apr 20
Collected from Joshua the balance of his April 15 account
Apr 25
Purchased office supplies, Php 2,300
Apr 29
Earned and…
On January 1, 2022, Oriole Company issued $430,000, 8%, 10-year bonds at face value. Interest is payable annually on January 1.
(a)
On December 31, 2024, Blossom Inc. borrowed $4,380,000 at 12% payable annually to finance the construction of a new building. In
2025, the company made the following expenditures related to this building: March 1, $525,600; June 1, $876,000; July 1,
$2,190,000; December 1, $2,190,000. The building was completed in February 2026. Additional information is provided as follows.
1.
2.
Other debt outstanding:
10-year, 13% bond, December 31, 2018, interest payable annually
6-year, 10% note, dated December 31, 2022, interest payable annually
March 1, 2025, expenditure included land costs of $219,000.
3. Interest revenue of $71,540 earned in 2025.
$5,840,000
2,336,000
Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building.
The amount of interest $
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