What amount should tolvin report as capitalized interest

Assignment Help Accounting Basics
Reference no: EM133011486

Question - On January 1, 2017, Tolvin Company signed a contract to have Bob's Builders construct a office building at a cost of $30,000,000. It was estimated that it would take four years to complete the project. Also on January 1, 2017, to finance the construction cost, Tolvin borrowed $20,000,000 payable in five annual installments of $4,000,000 plus interest at the rate of 8%. During 2017, Tolvin made progress payments totaling $5,000,000 under the contract, and the average amount of accumulated expenditures was $6,000,000 for the year. The excess borrowed funds were invested in short-term securities, from which Tolvin realized investment income of $650,000. What amount should Tolvin report as capitalized interest at December 31, 2017?

a. ?$650,000

b. ?$480,000

c. ?$400,000

d. ?$1,600,000

Reference no: EM133011486

Questions Cloud

What are the benefits of job crafting for individuals : What are the benefits of job crafting for individuals and for organizations?
What do you mean by adjusting entries in accounting : What do you mean by Adjusting Entries in Accounting? Explain major types of adjusting entries. Moreover also elaborate for which accounts
Which has difficulty of safeguarding logical computer access : Which has the difficulty of safeguarding logical computer access? An ever-growing population of Internet-connected devices, dubbed the Internet of Things
Who needs to be involved at point : You are an HR Advisor and one of the nurses in the Operating Room you provide HR support to sends you an email asking to meet with you. You know the employee ha
What amount should tolvin report as capitalized interest : During 2017, Tolvin made progress payments totaling $5,000,000 under the contract, What amount should Tolvin report as capitalized interest
Incidents of stereotyping in the workplace : What can managers do to reduce the incidents of stereotyping in the workplace?
Solve economic order quantity for cheeseburger company : Solve Economic Order Quantity. Cheeseburger and Taco Company purchases 16,705 boxes of cheese each year. It costs $27 to place and ship
What single payment six months from now be economically : What single payment 6 months from now would be economically equivalent to payments of $600 due (but not paid) four months ago and $900 due in 12 months?
What is the balance of unrealized gain or loss : On December 31, 2017, Tuwae Inc. holds 50,000 shares of Nail Corp. with market value of $6,300,000. What is the balance of Unrealized Gain or Loss

Reviews

Write a Review

Accounting Basics Questions & Answers

  Who owns the carryforwards after the corporate division

Call will generate $700,000 in taxable income on each of its first five years' worth of separate returns. Advise Call as to who "owns" the carryforwards

  What is best estimate of the company net operating income

Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $87,000

  Determine how much of the dividend will be paid

Zelk's preferred stock is cumulative and participating. Determine how much of the dividend will be paid to the preferred and common stockholders

  What transaction price should the company use

A new skating rink is going to be built in the village of Nobel for $5.2 million. What transaction price should the company use to recognize revenues

  Which accounts would not be closed by a merchandising

Which accounts would not be closed by a merchandising entity that uses the perpetual inventory system? Cost of Goods Sold. / Sales Returns and Allowances

  Provide a summary of information the video contained

Watch at least two videos, briefly describe one of the videos viewed, and provide a summary of information the video contained and how it fits in with this unit

  What items will appear on the lessees classified balance

What items will appear on the lessee's classified balance as of December 31, 2017? Provide the journal entries for 2017 for the lessor.

  Prepare the journal entry for the purchase of the equipment

On January1, 2014, A company purchased equipment from B Company for $100,000. Prepare the journal entry for the purchase of the equipment

  How much is the carrying amount of receivable on december

How much is the carrying amount of the receivable on December 31, 20x1? On January 1, 20x1, ABC Co. sold inventory costing P 1,800,000

  Some accountants argue that variances should be written off

some accountants argue that variances should be written off directly to cost of goods sold. regardless of materiality

  Which fraud flow and specific steps did fraudster manipulate

Which fraud flow and specific steps did the fraudster manipulate? How will the new processes installed deter, detect, or prevent this from recurring?

  Overhead application working backward the towson

overhead application working backward the towson manufacturing corporation applies overhead on the basis of machine

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd