Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available:

Capitalization period: January $1,2019,$ to June $30,2020$

Expenditures on project:

$2019$:

January $1$ $ $504,000$

May $1381,000$

October $1684,000$

$2020$:

March $11,584,000$

June $30684,000$

Amounts borrowed and outstanding:

$$1\mathrm{.}6$ million borrowed at $10\%,$ specifically for the project

$$6$ million borrowed on July $1,2018,$ at $12\%$

$$13$ million borrowed on January $1,2017,$ at $6\%$

Required:

Note: Round all final numeric answers to two decimal places.

Compute the amount of interest costs capitalized each year.

Capitalized interest, $2019$ $ fill in the blank $1$

Capitalized interest, $2020$ $ fill in the blank $2$

If it is assumed that the production complex has an estimated life of $25$ years and a residual value of $$0,$ compute the straight$-$line depreciation in $2020.$

$ fill in the blank $3$

Since GAAP requires accrual accounting, if a company capitalizes interest during the construction period it will report

higher

income than if it had not capitalized interest. In future periods, the same company will report

lower

income than if it had not capitalized interest. Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available:

$-$ Capitalization period: January $1,2019,$ to June $30,2020$

$-$ Expenditures on project:

$2019$:

$-$ Amounts borrowed and outstanding:

$\backslash (\backslash$$ $1\mathrm{.}6\backslash )$ million borrowed at $\backslash (10\backslash \%\backslash ),$ specifically for the project

$\backslash (\backslash$$ $6\backslash )$ million borrowed on July $1,2018,$ at $12\backslash \%$

$\backslash (\backslash$$ $13\backslash )$ million borrowed on January $1,2017,$ at $6\backslash \%$

Required:

Note: Round all final numeric answers to two decimal places.

$1.$ Compute the amount of interest costs capitalized each year.

Capitalized interest, $2019\backslash$$

Capitalized interest, $\backslash (2020\backslash$$ $\backslash )$

$2.$ If it is assumed that the production complex has an estimated life of $25$ years and a residual value of $\backslash (\backslash$$ $0\backslash ),$ compute the straight$-$line depreciation in $2020.$

$\backslash$$ $\backslash (\backslash$checkmark $\backslash )$ income than if it had not capitalized interest.