Question

Ch 10 Homework-1 Read-Only Saved to this PC you want to do 1 Normal No Spac... .Heading 1 Heading 2 Paragraph Styles Problem 3 Oa 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 $1,280,000 960,000 1,160,000 960,000 324,000 657,000 954, 000 On January 1, 2018, the company obtained a $3,600,000 construction rate. The loan was outstanding all of 2018 and 2019. The company's other interest-bearing debt included to long-term notes of$4,000,000 and S6,000,000 with interest rates of 11% and i 3%, respectively Both notes were outstanding during all of 2018 and 2019. Interest on all debt. The company's fiscal vear-end is December 31 loan with a 15% interest Required 1. Calculate the amount of interest that Mason should capitalize in 2013 and 2019 using the specific interest method 2. What is the total cost of the building? 3. Calculate the amount of interest espense that will appear in the 2018 and 2019 income statements

Answer 1

Computation of Amount of interest expense to be capitalized during the period,amount of expenditure to be carried forward during the period to income statements and computation of total cost incurred for Asset.