Skysong Industries Inc. started construction of a manufacturing facility for its own use at an estimated...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Skysong Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $11,000,000 on January 1, 2017. Skysong expected to complete the building by December 31, 2017. Skysong's debt, all of which was outstanding during the construction period, was as follows. ● ● Construction loan-11% interest, payable semiannually, issued December 31, 2016; $5,500,000 Long-term loan #1 - 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,650,000 Long-term loan # 2-12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,850,000 Assume that Skysong completed the facility on December 31, 2017, at a total cost of $11,330,000, and the weighted-average amount of accumulated expenditures was $7,480,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% and round final answer to O decimal places, e.g. 5,275.) Skysong Industries Inc. started construction of a manufacturing facility for its own use at an estimated cost of $11,000,000 on January 1, 2017. Skysong expected to complete the building by December 31, 2017. Skysong's debt, all of which was outstanding during the construction period, was as follows. ● ● Construction loan-11% interest, payable semiannually, issued December 31, 2016; $5,500,000 Long-term loan #1 - 10% interest, payable on January 1 of each year. Principal payable on January 1, 2019; $1,650,000 Long-term loan # 2-12% interest, payable on December 31 of each year. Principal payable on December 31, 2025; $3,850,000 Assume that Skysong completed the facility on December 31, 2017, at a total cost of $11,330,000, and the weighted-average amount of accumulated expenditures was $7,480,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% and round final answer to O decimal places, e.g. 5,275.)
Expert Answer:
Answer rating: 100% (QA)
Avoidable interest 830720 Explanation Weighted average interest ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
2x 8. Solve the initial value problem y' - (22) y = 0, y(0) = 3
-
The steam requirements of a manufacturing facility are being met by a boiler whose rated heat input is 5.5 3 106 Btu/h. The combustion efficiency of the boiler is measured to be 0.7 by a hand-held...
-
The compressed air requirements of a manufacturing facility are met by a 120-hp compressor that draws in air from the outside through an 9-m-long, 22-cm-diameter duct made of thin galvanized iron...
-
Measure each amount given in Problems 1721. a. Container C in ounces b. Container C in milliliters mL 500- 400- 300 200- 100 cups 2 1 -16-ez -14 oz -12 oz -110 oz 8 oz -16 oz -4 oz 2 oz Container C...
-
Consider a four-year project with the following information: initial fixed asset investment = $420,000; straight-line depreciation to zero over the four-year life; zero salvage value ; price = $25;...
-
In a survey, the Canadian Automobile Association (CAA) found that 58% of its members paid cash for their vehicles. Ten CAA members are selected at random. a. Find the probability that exactly half of...
-
Compute the value of the chi-square statistic. Exercises 49 refer to the following data: Electric motors are assembled on four different production lines. Random samples of motors are taken from each...
-
Gant Company reported net income of $157,000. It reported depreciation expense of $12,000 and accumulated depreciation of $47,000. Amortization expense was $8,000. Gant purchased new equipment during...
-
Required information Skip to question [The following information applies to the questions displayed below.] Income statement and balance sheet data for The Athletic Attic are provided below. THE...
-
(a) Could 25 g of argon gas in a vessel of volume 1.5 dm3 exert a pressure of 2.0 bar at 30C if it behaved as a perfect gas? If not, what pressure would it exert? (b) What pressure would it exert if...
-
An advertising firm is trying to determine the demographics for a new product. They have randomly selected 75 people in each of 5 different age groups and introduced the product to them. The results...
-
How much of a strategic portfolio allocation would you recommend to commodities? Pros and cons
-
a. If one year of college costs 12500 now and costs are increasing at a rate of 4% per year, how much will one year of college cost in 18 years? b. If college costs continue to increase at 4% per...
-
Robert is selling his home to his good friend, Lisa. Robert is selling his waterfront multi-storey home for $3,950,000, and he will take back a mortgage for $2,000,000 at a contract rate of j 2 =...
-
Why do managers at most hospitals prefer that unions not represent their employees? What can a healthcare organization gain from union-management cooperation? Some unions claim to improve the quality...
-
Fun Company has operating income of $300,000 and interest expense of $100,000.If it faces an average state-plus-federal tax rate of 40%, what is its net income?
-
Consider the region D = {(x, y) = R | x 2, (x 2) + y 1}. 1 Using the polar coordinates transformation with center at the point (1, 0) shows that D is the image of a simple region in the plane (r, 0)....
-
Interest Compounded Annually. When P dollars is invested at interest rate i, compounded annually, for t years, the investment grows to A dollars, where A = P(1 + i) t . Trevor's parents deposit $7800...
-
Analysis of Given Ratios Robbins Company is a wholesale distributor of professional equipment and supplies. The company?s sales have averaged about $900,000 annually for the 3-year period 2009?2011....
-
Investment Classifications For the following investments identify whether they are: 1. Trading Securities 2. Available-for-Sale Securities 3. Held-to-Maturity Securities Each case is independent of...
-
(Bond Theory: Price, Presentation, and Retirement) On March 1, 2011, Sealy Company sold its 5-year, $1,000 face value, 9% bonds dated March 1, 2011, at an effective annual interest rate (yield) of...
-
Calculate the residual enthalpy and entropy for propane at \(312 \mathrm{~K}\) and \(2 \mathrm{MPa}\) using the van der Waals equation of state, given that \(a=0.877 \mathrm{~Pa}\left(\mathrm{~m}^{3}...
-
Using the generalized virial coefficient of correlation, estimate the residual enthalpy and entropy for ethylene at \(339.7 \mathrm{~K}\) and \(1 \mathrm{bar}\), given that \(T_{\mathrm{C}}=283...
-
Derive an expression to calculate the change in enthalpy and entropy of a real gas obeying the following equation of state along an isothermal path between the initial and final pressures \(P_{1}\)...
Study smarter with the SolutionInn App