29 Jun 1. During 2012, ABC company finis
Question
hed construction of a new warehouse. Construction began on 1/1/2011. The cost of the new warehouse was $3,000,000 with the cost incurred evenly throughout the construction. The following information is provided:
ABC Co. incremental interest rate is 10%
Actual interest rate during 2012 was $135,000
The average accumulated expenditures was $1,500,000
Requirement:
A.How much interest should be calculated?
B.What is the entry to capitalize the interest?
2.During 2012 XYZ company began and completed a small warehouse.Construction on the warehouse began on 1/2/2012.Expenditures were made as follows:
January 2 $1,000,000
March 1 $900,000
July 1 $400,000
Oct 1 $800,000
XYZ financed the project by issuing $1,000,000 in stock at the beginning of 2012 and borrowed $1,200,000 from the bank at an interest rate of 8%. In addition the company had the following debt:$1,000,000, interest rate of 9% borrowed in 2010,$2,000,000,11% note borrowed in 2009.Both of the debts are due in 2015.
Requirement:
A.Calculated the 2012 Weighted Average Accumulated Expenditures
B.How much is avoidable interest
C.How much is actual interest
D.Make the entry capitalizing the interest in 2012.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.