Homework Answers
The answer to (a), (b) & (c) is as follows:
(a) The amount of interest that Mason should capitalize in 2021 & 2022 under specific interest method is:
Borrowing Cost:
2021:
Borrowing Cost= $3,000,000*10%= $300,000
The Borrowing cost calculated above would be capitalize in 2021.
2022:
Borrowing Cost=$3,000,000*10%= $300,000
The Borrowing cost calculated above would be capitalize in 2022.
(b) Cost of the Building would be following:
1. If Interest is considered as part of Cost of Building:
Total Cost= $53,550,000
2. If interest is not considered as part of Cost of building:
Total Cost= $47,550,000
(c) Amount of Interest Expense that will appear in income statements in 2021 & 2022:
In 2021:
$3,000,000*10%= $300000
$4,000,000*6%= $240000
$6,000,000*8%= $480000
Total Interest Expenses for 2021- $1,080,000
In 2022-
$3000000*10%= $300000
$4000000*6%= $240000
$6000000*8%= $480000
Total Interest Expenses for 2022- $1,080,000
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Help Save & E. Chec Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7) On January...
Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7) On January 1, 2021, the Mason Manufacturing...
Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7) On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,000,000 600,000 800.000 600,000 270,000 585.000 900.000 On January 1, 2021, the company obtained a...
Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7] On January 1, 2021, the Mason Manufacturing...
Problem 10-9 (Static) Interest capitalization; specific interest
method [LO10-7]
On January 1, 2021, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2022. Expenditures on
the project were as follows:
January 1, 2021
$
1,000,000
March 1, 2021
600,000
June 30, 2021
800,000
October 1, 2021
600,000
January 31, 2022
270,000
April 30, 2022
585,000
August 31, 2022
900,000
On January 1, 2021, the company obtained...
Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7] On January 1, 2021, the Mason Manufactu...
Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7] On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 1,000,000 March 1, 2021 600,000 June 30, 2021 800,000 October 1, 2021 600,000 January 31, 2022 270,000 April 30, 2022 585,000 August 31, 2022 900,000 On January 1, 2021, the company obtained...
Problem 10-9 (Static) Interest capitalization, specific interest method (LO10-7] On January 1, 2021, the Mason Manufacturing...
Problem 10-9 (Static) Interest capitalization, specific interest method (LO10-7] On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 On January 1, 2021, the company obtained a...
Problem 10-9 Interest capitalization; specific interest method [LO10-7) On January 1, 2018, the Mason Manufacturing Company...
Problem 10-9 Interest capitalization; specific interest method [LO10-7) On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019 Expenditures on the project were as follows: January 1, 2018 March 1, 2018 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 $2,050,000 1,800,000 2,800,000 1,800,000 450,000 783,000 1,080,000 On January 1, 2018, the company obtained a $5,000,000...
Problem 10-9 Interest capitalization; specific interest method (LO10-7) On January 1, 2018, the Mason Manufacturing Company...
Problem 10-9 Interest capitalization; specific interest method (LO10-7) On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019 Expenditures on the project were as follows: January 1, 2018 March 1, 2018 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 $1,870, cea 1,560, eee 1,760, Dee 1,558,888 414, eae 747, e 1,044,000 On January 1, 2018,...
Problem 10-9 Interest capitalization; specific interest method (L010-7] On January 1, 2018, the Mason Manufacturing Company...
Problem 10-9 Interest capitalization; specific interest method (L010-7] On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30.2019 Expenditures on the project were as follows: January 1 2018 March 1, 2018 June 30, 2018 October 2016 January 31, 2019 April 30, 2019 August 31, 2019 $1,870,000 1,560, ate 1,760,089 1,560, eee 214.000 747 1,044,999 On January 1 2018, the company obtained a $4,600,000...
Problem 10-10 Interest capitalization; weighted average method (LO10-7) On January 1, 2018, the Mason Manufacturing Company...
Problem 10-10 Interest capitalization; weighted average method (LO10-7) On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 March 1, 2018 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 $1,360,000 810,000 160,000 670,000 585,000 900,000 1,530,000 On January 1, 2018, the company obtained a $3...
On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate.....
On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate.. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million...
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used...
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,280,000 960,000 1,160,000 960,000 324,000 657,000 954,000 On January 1, 2021, the company obtained a $3,600,000 construction loan with a 15% interest rate. The...
Problem 10-9 (Static) Interest capitalization; specific interest method [LO10-7) On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,000,000 600,000 800.000 600,000 270,000 585.000 900.000 On January 1, 2021, the company obtained a...
Problem 10-9 (Static) Interest capitalization; specific interest
method [LO10-7]
On January 1, 2021, the Mason Manufacturing Company began
construction of a building to be used as its office headquarters.
The building was completed on September 30, 2022. Expenditures on
the project were as follows:
January 1, 2021
$
1,000,000
March 1, 2021
600,000
June 30, 2021
800,000
October 1, 2021
600,000
January 31, 2022
270,000
April 30, 2022
585,000
August 31, 2022
900,000
On January 1, 2021, the company obtained...
Problem 10-9 (Static) Interest capitalization, specific interest method (LO10-7] On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 On January 1, 2021, the company obtained a...
Problem 10-9 Interest capitalization; specific interest method [LO10-7) On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019 Expenditures on the project were as follows: January 1, 2018 March 1, 2018 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 $2,050,000 1,800,000 2,800,000 1,800,000 450,000 783,000 1,080,000 On January 1, 2018, the company obtained a $5,000,000...
Problem 10-9 Interest capitalization; specific interest method (LO10-7) On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019 Expenditures on the project were as follows: January 1, 2018 March 1, 2018 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 $1,870, cea 1,560, eee 1,760, Dee 1,558,888 414, eae 747, e 1,044,000 On January 1, 2018,...
Problem 10-9 Interest capitalization; specific interest method (L010-7] On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30.2019 Expenditures on the project were as follows: January 1 2018 March 1, 2018 June 30, 2018 October 2016 January 31, 2019 April 30, 2019 August 31, 2019 $1,870,000 1,560, ate 1,760,089 1,560, eee 214.000 747 1,044,999 On January 1 2018, the company obtained a $4,600,000...
Problem 10-10 Interest capitalization; weighted average method (LO10-7) On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 March 1, 2018 June 30, 2018 October 1, 2018 January 31, 2019 April 30, 2019 August 31, 2019 $1,360,000 810,000 160,000 670,000 585,000 900,000 1,530,000 On January 1, 2018, the company obtained a $3...
On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate.. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 On January 1, 2021, the company obtained a $3 million construction loan with a 10% interest rate. Assume the $3 million...
On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 March 1, 2021 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 $1,280,000 960,000 1,160,000 960,000 324,000 657,000 954,000 On January 1, 2021, the company obtained a $3,600,000 construction loan with a 15% interest rate. The...
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