Question: Please show how you get answers and add formulas ? Carver Department Stores, Inc., constructs its own stores. In the past, no cost has been

Please show how you get answers and add formulas

? Carver Department Stores, Inc., constructs its own stores. In the past, no cost has been added to the asset value for interest on funds borrowed for construction. Management has decided to correct its policy and desires to include interest as part of the cost of a new store just being completed. Based on the following information, how much interest would be added to the cost of the store

1. in 2015 and (Answer Total Capitalization for 2015=$91,792)

Total constructionist expenditures

January 2, 2015..........................$500,000

May 1, 2015................................450,000

November 1, 2015......................700,000

March 1,2016............................950,000

September 1,2016....................800,000

November 30,2016.....................600,000

Outstanding Company Debt:

Mortage related directly to new store; interest rate, 10% term

five years from beginning of construction......................$1,500,000

General bond liability:

Bonds issued just prior to construction of store; interest rate

8% for 10 years..............................................................$500,000

Bonds issued prior to construction; interest rate, 12% mature in five years.....$800,000

Estimated cost of equality capital....14%

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