Mason Manufacturing Company | |||||
Computation of the interest to be capitalised for 2021- specific interest method | |||||
Fraction | |||||
Expenditure date | Accumulated expd. | Num. | Den. | Avg. accumulated expd. | |
jan. 1,2021 | 1090000 | 12 | 12 | 1090000 | |
march 1,2021 | 780000 | 10 | 12 | 650000 | |
June 30,2021 | 980000 | 6 | 12 | 490000 | |
Oct. 1, 2021 | 780000 | 3 | 12 | 195000 | |
3630000 | 2425000 | ||||
Total Capitalised interest for 2018 = 3630000 * 16 % = $ 580800 | |||||
Computation of the interest to be capitalised for 2022 - specific interest method | |||||
Fraction | |||||
Expenditure date | Accumulated expd. | Num. | Den. | Avg. accumulated expd. | |
Jan. 1, 2022 | 4210800 | 9 | 9 | 4210800 | ( 3630000 + 580800 = 4210800 ) |
Jan. 31,2022 | 297000 | 8 | 9 | 264000 | |
April 30, 2022 | 630000 | 5 | 9 | 350000 | |
Aug. 31, 2022 | 927000 | 1 | 9 | 103000 | |
6064800 | 4927800 | ||||
Weighted Average rate of all other debt | |||||
2000000 | 10% | 200000 | |||
8000000 | 12% | 960000 | |||
10000000 | 1160000 | ||||
1160000 / 10000000 = 11.60 % | |||||
Interest capitalisation ( 2022 ) | |||||
3300000 | 16% | 528000 | 9 divided by 12 | 396000 | |
1627800 | 11.60% | 188824.8 | 9 divided by 12 | 141619 | |
4927800 | 537619 | ||||
Cost of building | |||||
Expenditures in 2021 | 3630000 | ||||
Intt. Capitalised in 2021 | 580800 | ||||
Expenditures in 2022 | 1854000 | ||||
Intt. Capitalised in 2022 | 537619 | ||||
Total cost of building | 6602419 | ||||
Interest expense for 2021 | |||||
3300000 * 16% = | 528000 | ||||
2000000 * 10 % | 200000 | ||||
8000000 * 12 % | 960000 | ||||
1688000 | |||||
Less:- Intt. Capitalised in 2021 | 580800 | ||||
2021 expense | 1107200 | ||||
Interest expense for 2022 | |||||
3300000 * 16% = | 528000 | ||||
2000000 * 10 % | 200000 | ||||
8000000 * 12 % | 960000 | ||||
1688000 | |||||
Less:- Intt. Capitalised in 2022 | 537619 | ||||
2022 expense | 1150381 | ||||
The required answers are highlighted in yellow colour. | |||||
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 $1,310,000 1,020,000 1,220,000 1,020,000 333,000 666,000 963,000 On January 1, 2021, the company obtained a $3,700,000 construction loan with a 12% interest rate. The...
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: $1,e9e, eee 780,000 98e, eee 780,eee 297,eee 630,eee 927,e00 January 1, 2021 March 1, 2021 June 30, 2021 October 1, 28e21 January 31, 2022 April 30, 2822 August 31, 2022 es On January 1, 2021, the company obtained a $3,300,000 construction loan with a 16...
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 $ 1,090,000 March 1, 2021 780,000 June 30, 2021 980,000 October 1, 2021 780,000 January 31, 2022 297,000 April 30, 2022 630,000 August 31, 2022 927,000 On January 1, 2021, the company obtained a $3,300,000 construction loan with a 16% interest rate....
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 $ 1,350,000 March 1, 2021 1,080,000 June 30, 2021 1,280,000 October 1, 2021 1,080,000 January 31, 2022 342,000 April 30, 2022 $675,000 August 31, 2022 $972,000 On January 1, 2021, the company obtained a $3,800,000 construction loan with a 15% interest rate....
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...
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 $1.850,000 1.500.000 1,700,000 1.500.000 405,000 738.000 1,035,000 On January 1, 2021, the company obtained a $4,500,000 construction loan with a 12% Interest rate. The...
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 $1,420,000 1,140,000 1,340,000 1,140,000 351,000 684,000 981,000 On January 1, 2021, the company obtained a $3,900,000 construction loan with a 12% interest rate. The...
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 $1,420,000 1,140,000 1,340,000 1,140,000 351,000 684,000 981,000 On January 1, 2021, the company obtained a $3,900,000 construction loan with a 12% Interest rate. The...
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 $1,850,000 1,500,000 1,700,000 1,500,000 June 30, 2021 October 1, 2021 January 31, 2022 April 30, 2022 August 31, 2022 405,000 738,000 1,035,000 On January 1, 2021, the company obtained a $4,500,000 construction loan with a 12% interest rate. The...
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 $1,870,000 1,560,000 1,760,000 1,560,000 414,000 747,000 1,044,000 On January 1, 2021, the company obtained a $4,600,000 construction loan with a 15% interest rate. The...