Compute the depreciation expense for the year ended

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Reference no: EM13577674

Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,017,700 on January 1, 2014. Harrisburg expected to complete the building by December 31, 2014. Harrisburg has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2013		$2,013,200
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2015		1,612,800
Long-term loan-11% interest, payable on January 1 of each year; principal payable on January 1, 2018		1,016,200

Assume that Harrisburg completed the office and warehouse building on December 31, 2014, as planned at a total cost of $5,217,300, and the weighted average amount of accumulated expenditures was $3,816,000. Compute the avoidable interest on this project.

Avoidable Interest:????

Compute the depreciation expense for the year ended December 31, 2015. Harrisburg elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $300,300.

Depreciation Expense????

Reference no: EM13577674

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