What is the amount of interest that crocus should capitalize

Assignment Help Financial Accounting
Reference no: EM132939122

On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions):

July 1, 2020                 56
October 1, 2020            24
February 1, 2021               32
April 1, 2021                 22
September 1, 2021                21
October 1, 202                        17

On July 1, 2020, Crocus obtained a $72 million construction loan with a 7% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 9%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.

Problem 1:
What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?

Reference no: EM132939122

Questions Cloud

Provide a summarized analysis of the performance : Provide a summarized analysis of the performance of managed care plans in the United States
Identify two situations when can apply the dividend approach : Identify two situations when you can apply the dividend approach method and the total company method. Identify 2 or 3 companies' capital structure
Discuss the alleviation of issues or challenges : Explain the steps in planning, developing, and implementing the EHR system using a systems development life cycle and Discuss the alleviation of issues
What interest capitalized was : What Interest (using the specific interest method) capitalized for 2021 was? On January 1, 2021, Kendall Inc. began construction of an automated cattle
What is the amount of interest that crocus should capitalize : Crocus Company began construction, What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
Compute depreciation and the book value of drill press : Compute depreciation for 2021 and 2022 and the book value of the drill press at December 31, 2021 and December 31, 2022, assuming the double-declining-balance
Should company replace year-old machine and why : Your? company's tax rate is 35%?, and the opportunity cost of capital for this type of equipment is 12%. Should your company replace its? year-old machine?
Should big rock brewery purchase current? machine : Big Rock Brewery currently rents a bottling machine,Should Big Rock Brewery continue to? rent, purchase its current? machine, or purchase the advanced? machine?
List what has impacted you score the most : List what has impacted you score the most. Were there surprises you learned about that have had a positive or negative impact on your score

Reviews

Write a Review

Financial Accounting Questions & Answers

  What would be the last dividend that was paid

What would be the last dividend that was paid? Common stocks from DEF company sells for $15 a share and pays an annual dividend with annual increment

  How are past performance useful in companys performancee

How are past performance and industry norms useful in evaluating a company's performance? What are their limitations?

  What are the planned purchases for the month of april

They are expecting $920 in reductions. If their inventory starts the month at $3,600 and ends the month at $5,200 what are the planned purchases for the month of April?

  Statements regarding adjusting entries

Which of the following statements regarding adjusting entries is not correct? Adjusting entries nearly always involve the cash account and either a revenue or expense account. Adjusting entries may reduce amounts on the balance sheet and increase cor..

  How palantir would account for the sales commission

Prepare the journal entries for 2017 for the Osgilith MRI machines sold by Palantir to customers who elect the delayed payment option.

  What are the two fundamental qualitative characteristics

Provide one example of a conflict between the two fundamental qualitative characteristics of financial information, relevance and faithful representation.

  What is the heat of reaction per mole of acid

What is the heat of reaction per mole of acid? Assume the mixture has a specific heat capacity of 4.18 J/(g•K) and that the densities of the reactant solutions are both 1.00 g/mL.

  How do find the variance in the expected rate of return

Hayek Corporation has a 0.3 probability of a return of 0.21, How do find the variance in the expected rate of return of Hayek Corporation?

  How should record the investment for year end reporting

How should record the investment for year end reporting, and how should we record the dividends received? On June 1, 2019, TTT acquired 30% of WL

  Identify six internal control deficiencies in silver inc

Identify SIX internal control DEFICIENCIES in Silver Inc. payroll system. Can you think of any RECOMMENDATIONS to address each of these deficiencies.

  How managerial accounting helps managers to improve

How either financial accounting helps external stakeholders make informed decisions or how managerial accounting helps managers to improve

  What explicit statement is required in a set of ifrs

ABC, Inc. is adopting IFRS for the first time, effective December 31, 2016. Their opening statement of financial position will be as of January 1, 2014. The IASB has issued a new standard that is effective as of January 1, 2016.

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