Reference no: EM131118083
Capitalization of Interest the following three situations involve the capitalization of interest.
Situation I
On January 1, 2010, Columbia, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,000,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2010, to finance the construction cost, Columbia borrowed $4,000,000 payable in 10 annual installments of $400,000, plus interest at the rate of 10%. During 2010, Columbia made deposit and progress payments totaling $1,500,000 under the contract; the weighted-average amount of accumulated expenditures was $900,000 for the year. The excess borrowed funds were invested in short-term securities, from which Columbia realized investment income of $250,000.What amount should Columbia report as capitalized interest at December 31, 2010?
Situation II
During 2010, Evander Corporation constructed and manufactured certain assets and incurred the following interest costs in connection with those activities.
Interest Costs
Incurred
Warehouse constructed for Evander's own use $30,000
Special-order machine for sale to unrelated customer, produced according
to customer's specifications 9,000
Inventories routinely manufactured, produced on a repetitive basis 8,000 all of these assets required an extended period of time for completion. Assuming the effect of interest capitalization is material, what is the total amount of interest costs to be capitalized?
Situation III
Antonio, Inc. has a fiscal year ending April 30. On May 1, 2010, Antonio borrowed $10,000,000 at 11% to finance construction of its own building. Repayments of the loan are to commence the month following completion of the building. During the year ended April 30, 2011, expenditures for the partially completed structure totaled $6,000,000. These expenditures were incurred evenly throughout the year. Interest earned on the unexpended portion of the loan amounted to $650,000 for the year. How much should be shown as capitalized interest on Antonio's financial statements at April 30, 2011?
(CPA adapted)
|
Test the mean difference for significance
: The scores on a (hypothetical) vocabulary test of a group of 20 year olds and a group of 60 year olds are shown below
|
|
Market-based segments of the health care organization
: Describe market-based segments of the health care organization you selected. Include demographic characteristics of segmented consumers that influence buying behaviors of the market. Then, analyze how the organization is responding to these market..
|
|
Effect of alcohol on perceptual motor ability
: A (hypothetical) experiment is conducted on the effect of alcohol on perceptual motor ability. Ten subjects are each tested twice, once after having two drinks and once after having two glasses of water.
|
|
Communication affects your life
: Discuss how communication plays a role in academic, professional, personal, and civic aspects of your life. Next, provide two (2) examples of how communication affects your life.
|
|
Capitalization of interest the following three situations
: Capitalization of Interest the following three situations involve the capitalization of interest
|
|
The scores of a random sample
: b. The researcher realizes that she accidentally recorded the score that should have been 76 as 67. Are these corrected scores significantly different from 65 at the .05 level?
|
|
Alice does not have built-in collision detection
: Give an example of an instruction that uses the function to avoid collision.
|
|
Theories of psychotherapy
: Question One is about theory. In your courses you have studied many theories in psychology. There are psychology theories about behavior, thoughts, and emotions. There are theories of psychotherapy.
|
|
Calculate the interest revenue weighted average accumulated
: Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2010. Round all computations to the nearest dollar
|