On january 1 2013 the mason manufacturing company began

Reference no: EM13484260

On January 1, 2013, the Mason Manufacturing company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2014. Expenditures on the project were as follows:

January 1, 2013 1,000,000

March 1, 2013 600,000

June 30, 2013 800,000

October 1, 2013 600,000

January 31, 2014 270,000

April 30, 2014 585,000

August 31, 2014 900,000

On January 1, 2013, the company obtained a $3 million constrruction loan with a 10% interest rate. The loan was outstanding all of 2013 and 2014. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 6% and 8% respectively. Both notes were outstanding during all of 2013 and 2014. Interest is paid annually on all debt. The company's fiscal year-end is December 31.

Required:

1) Calculate the amount of interest that Mason should capitalize in 2013 and 2014 using the specific interest method.

2) What is the total cost of the building?

3) Calculate the amount of interest expense that will appear in the 2013 and 2014 income statements.

Reference no: EM13484260

Questions Cloud

What is the monthly payment on a 30yr 424 mortgage how much : 1. we are purchasing a house which costs 450000 and we are mortgaging 80. use bank rate.com not the chartsa.

In may we produced 48 tables the 48 tables used 950 linear : 1. we produce wood tables. the standard costs are as follows per tablewood - 20.5 linear feet at a cost of 13.15

Compute trend analysis for net revenue and net income round : magic oaks realtys net revenue and net income for the following five-year period using 2010 as the base year

Wat interest rate swap will convert the firms interest : a corporation has issued a 10 million issue of floating-rate bonds on which it pays an interest rate 1 over the libor

On january 1 2013 the mason manufacturing company began : on january 1 2013 the mason manufacturing company began construction of a building to be used as its office

Red and green each own common stock in the blue company if : 1.a corporation may purchase treasury stock for all of the following reasons except a. to support the market price of

If a bond manager swaps a bond for one that is identical in : the following questions are from past cfa examinations.a. a 6 coupon bond paying interest annually has a modified

London purchased a piece of real estate last year for 83800 : london purchased a piece of real estate last year for 83800. the real estate is now worth 103200. if london needs to

Does your company have an accounts receivable balance if so : 1. does your company have an accounts receivable balance? if so what is it?2. has it increased or decreased

User Account

All Pages