On January 1, 2017 Mercy Co. began construction of a small building. The following expenditures were...
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On January 1, 2017 Mercy Co. began construction of a small building. The following expenditures were incurred for construction: January 1 March 1 April 1 May 1 June 1 July 1 $200,000 300,000 to 712 250,000 97 720,000 1,080,000 400,000 8112 7112 6112 = 200,000 = 250,000 =187500 =480,000 630,000 200,000 : 2,450,000 > The building was completed and occupied on Dec. 31, 2017. a) To help pay for construction $1,500,000 was borrowed on Jan. 1 on a 12%, five-year note payable. 1,887500 12/2947500 The only other debt outstanding during the year was a $3,000,000, 10% note issued two years ago. (a) Calculate the weighted-average accumulated expenditures. (b) Calculate avoidable interest. (c) If the other costs of constructing the building (comprising materials, labor and overhead) are $2,950,000 (besides capitalized interest cost) and the building has an estimated life of 40 years with a salvage value of $175,000 what is the depreciation for the year 2018? On January 1, 2017 Mercy Co. began construction of a small building. The following expenditures were incurred for construction: January 1 March 1 April 1 May 1 June 1 July 1 $200,000 300,000 to 712 250,000 97 720,000 1,080,000 400,000 8112 7112 6112 = 200,000 = 250,000 =187500 =480,000 630,000 200,000 : 2,450,000 > The building was completed and occupied on Dec. 31, 2017. a) To help pay for construction $1,500,000 was borrowed on Jan. 1 on a 12%, five-year note payable. 1,887500 12/2947500 The only other debt outstanding during the year was a $3,000,000, 10% note issued two years ago. (a) Calculate the weighted-average accumulated expenditures. (b) Calculate avoidable interest. (c) If the other costs of constructing the building (comprising materials, labor and overhead) are $2,950,000 (besides capitalized interest cost) and the building has an estimated life of 40 years with a salvage value of $175,000 what is the depreciation for the year 2018?
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Related Book For
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
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