What is the justification for capitalizing such interest

Assignment Help Accounting Basics
Reference no: EM131117936

1. One financial accounting issue encountered when a company constructs its own plant is whether the interest cost on funds borrowed to finance construction should be capitalized and then amortized over the life of the assets constructed. What is the justification for capitalizing such interest? 

Reference no: EM131117936

Questions Cloud

What interest rates should be used in determining : What interest rates should be used in determining the amount of interest to be capitalized? How should the amount of interest to be capitalized be determined?
The basic cost accounting practices for job shops : You will summarize the basic cost accounting practices for job shops, material processors, and advanced manufacturing organizations using managerial accounting terminology.
What is the length of the trail : A straight trail with a uniform inclination of 11° leads from a lodge at an elevation of 600 feet to a mountain lake at an elevation of 9000 feet. What is the length of the trail (to the nearest foot)
Create a new event by selecting let the arrow keys move : Then, link the biplane, as shown below. Run the flight simulator again to see the effect.
What is the justification for capitalizing such interest : One financial accounting issue encountered when a company constructs its own plant is whether the interest cost on funds borrowed to finance construction should be capitalized and then amortized over the life of the assets constructed. What is the ju..
The common stock of plymouth shippers : Over the last four years, the common stock of Plymouth Shippers has had an arithmetic average return of 9.3 percent. Three of those four years produced returns of 14.1 percent, 15.6 percent, and 3.4 percent, respectively. What is the geometric av..
Community of north philadelphia : Who found Temple University and how did the founding of Temple change the community of North Philadelphia?
Discuss the rise of the hundred years : Discuss the rise of the Hundred Years' War. Select the one development related to the war that you think was most significant for the development of Europe in this time, and discuss why?
Find the equation of the tangent line to the graph : Find the equation of the tangent line to the graph of f(x)=5-x2  at (2,1) you could first use the limit definition to find the slop. What expression would represent the slope?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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