On January 1, 2025, Swifty, Inc. signed a fixed price contract to have Builder Associates construct a major plant facility at a cost of $4,471,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2025, to finance the construction cost, Swifty borrowed $4,471,000 payable in 10 annual installments of $447, 100, plus interest at the rate of 10%. During 2025, Swifty made deposits and progress payments totaling $1,676, 625 under the contract; the weighted - average amount of accumulated expenditures was $894, 200 for the year. The excess borrowed funds were invested in short-term securities, from which Swifty realized investment income of $265,300. What amount should Swifty report as capitalized interest at December 31, 2025?
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- On January 1, 2022, Flounder Outfitters signed a fixed-price contract to have Builder Associates construct a major piant facility at a cost of R$4,320,000. It was estimated that it would take 3 years to complete the project. Also on January 1. 2022, to finance the construction cost, Flounder borrowed R$4,320,000 payable in 10 annual installments of R$432,000, plus interest at the rate of 10%. During 2022, Flounder made deposit and progress payments totaling R$1.620,000 under the contract. The excess borrowed funds were invested in short-term securities, from which Flounder realized investment income of R$54,000. What amount should Flounder report as capitalized borrowing cost at December 31, 2022? Capitalized borrowing cost R$On January 1, 2023, Marigold Inc. signed a fixed-price contract to have Builder Associates construct a major head office facility a a cost of $4 million. It was estimated that it would take three years to complete the project. Also, on January 1, 2023, to finance the construction cost, Marigold borrowed $4 million that is repayable in 10 annual instalments of $400,000, plus interest at the rate of 10%. During 2023, Marigold made deposit and progress payments totalling $1.5 million under the contract; the weighted average amount of accumulated expenditures was $791,000 for the year. The excess amount of borrowed funds was invested in short-term securities, from which Marigold realized investment income of $24,300. For situation 1, what amount should Marigold report as capitalized borrowing costs at December 31, 2023? (If an answer is zero, please enter O. Do not leave any fields blank.) Capitalized borrowing $ 375700On January 1, 2020, Marigold, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,419,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2020, to finance the construction cost, Marigold borrowed $4,419,000 payable in 10 annual installments of $441,900, plus interest at the rate of 10%. During 2020, Marigold made deposit and progress payments totaling $1,657,125 under the contract; the weighted-average amount of accumulated expenditures was $883,800 for the year. The excess borrowed funds were invested in short-term securities, from which Marigold realized investment income of $254,600. What amount should Marigold report as capitalized interest at December 31, 2020?
- On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000. Term of payments includes issuing a 5-year noninterest-bearing note payable equally every end of the year. The effective interest rate is 15%. The entity used 2 decimal places for the PVF. Requirements: How much is the initial cost of the equipment?Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $800,000, three-year note that specified 5% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 10% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Amber Mining and Milling’s purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)On January 1, 2016, Randolf Company signed a contract to have Rory Associates construct a manufacturing facility at a cost of $14,000,000. It was estimated that it would take three years to complete the project. Also on January 1, 2016, to finance the construction cost, Randolf borrowed $14,000,000 payable in seven annual installments of $2,000,000 plus interest at the rate of 9%. During 2016, Randolf made progress payments totaling $5,000,000 under the contract, and the average amount of accumulated expenditures was $3,000,000 for the year. The excess borrowed funds were invested in short-term securities, from which Randolf realized investment income of $330,000. What amount should Randolf report as capitalized interest at December 31, 2016? $510,000 $0 $1,260,000 $270,000
- On January 1, 2013, Right Company signed a contract to have Bozy Associates construct a manufacturing facility at a cost of $8,000,000. It was estimated that it would take three years to complete the project. Also on January 1, 2013, to finance the construction cost, Right borrowed $8,000,000 payable in ten annual installments of $800,000, plus interest at the rate of 12%. During 2013, Right made progress payments totaling $2,000,000 under the contract; the average amount of accumulated expenditures was $900,000 for the year. The excess borrowed funds were invested in short-term securities, from which Right realized investment income of $130,000. What amount should Right report as capitalized interest at December 31, 2013? a. $ 88,000b. $220,000c. $108,000d. $880,000On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions): July 1, 2020 94 October 1, 2020 62 February 1, 2021 70 April 1, 2021 41 September 1, 2021 40 October 1, 2021 26 On July 1, 2020, Crocus obtained a $110 million construction loan with a 6% 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 8%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.5 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 X Answer is not complete. Req 1 3 and 4
- Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $700,000, three-year note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Truax Corporation’s sale of the lathe. Assume Truax spent $500,000 to construct the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity for Truax. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1,…ABC Company obtained a loan of $100,000 at 10% annual interest rate on January 1, 2022. The loan was used to finance a project that qualifies for capitalization of borrowing costs. The company incurs $2,000 in loan processing fees and $1,500-in legal fees related to the loan. The project is completed on December 31, 2022. The weighted average cost of capital of ABC Company is 12%. Compute the amount of borrowing costs to be capitalized and the amount to be expensed in the income statement for the year ended December 31, 2022.American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.8 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 Reg 13 and 4 Prepare an amortization schedule for the…