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valentinak56 [21]
3 years ago
9

January 1, 2016, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use

on September 30, 2017. Expenditures on the project were as follows: January 1, 2016 September 1, 2016 December 31, 2016 March 31, 2017 September 30, 2017 $200,000 $300,000 $300,000 $300,000 $200,000 Kendall borrowed $750,000 on a construction loan at 12% interest on January 1, 2016. This loan was outstanding throughout the construction period. The company had $4,500,000 in 9% bonds payable outstanding in 2016 and 2017.
Interest capitalized for 2017 was ___.
Business
1 answer:
tankabanditka [31]3 years ago
4 0

Answer:

Interest capitalized for 2017 = $86,805

Explanation:

As per the data given in the question,

Average expenditure for 2016 = ($200,000×12÷12) +($300,000×4÷12)+($300,000×0÷12)

=$300,000

Interest capitalized for 2016 =($200,000×12÷12)+($300,000×4÷12)+($300,000×0÷12)×12%

= $36,000

Average expenditure for 2017 :

Accumulated expenditure in 2016 = ($200,000+$300,000+$300,000 +$36,000)×9÷9

= $836,000

For March-31,2017 = $300,000×6÷9

= $200,000

For Sept-30,2017 = $200,000×0÷9 = $0

Average expenditure for 2017 = $836,000 + $200,000 + $0

= $1,036,000

Interest capitalized for 2017 :

Specific borrowing = $750,000×9÷12×12%

= $67,500

Excessive amount = ($1,036,000 - $750,000)×9÷12×9%

= $19,305

Interest capitalized for 2017 = $67,500 + $19,305

= $86,805

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Just prior to completing the adjusted trial balance, Paula prepared the __________ section. After she finishes the adjusted tria
iVinArrow [24]

Answer:

Just prior to completing the adjusted trial balance, Paula prepared the <em><u>Adjusting entries </u></em>section. After she finishes the adjusted trial balance, she will complete the <em><u>financial statement </u></em>section of the worksheet.

Explanation:

Starting from the two first column of the unadjusted trial balance The accountant will prepare and complete the adjusting entries section. After that, the combination of the unadjusted TB and the adjusting entries will give the adjusted trial balance.  After that, the account balance is distributed according to the financial statement --> Balance sheet and income statement.

3 0
2 years ago
When the price of a good is $5, the quantity demanded is 120 units per month; when the price is $7, the quantity demanded is 100
Gre4nikov [31]
Price elasticity can be calculated using the attached formula where:
the first term represents the % change in quantity and the second term represents the % change in price

% change in quantity = (100-120) / (220/2) = -2/11 x 100 = -18.1818%
% change in price = (7-5) / (12/2) = 33.3333%

price elasticity = 18.1818/33.3333 = 0.55

Note that the price elasticity is usually taken as an absolute value.

6 0
3 years ago
In a given year, Jennifer earns $50,000 and spends $40,000. During the same period, Stcve earns $30,000 and spends $27,000. If J
elena55 [62]

Answer:

The sales tax is regressive with respect to income

Explanation:

sales tax by Jennifer = 0.1*30000

                                   = 3000

tax/income = 3000/50000

                   = 6%

sales tax by steve = 0.1*27000

                                   = 2700

tax/income = 2700/30000

                   = 9%

The tax increases with decrease in income, it indeed is regressive on the whole.

Therefore, The sales tax is regressive with respect to income

6 0
3 years ago
Curvilinear costs always increase: a. When management performs break-even analysis. b. When volume increases, but at a nonconsta
Ilia_Sergeevich [38]

Answer:

The correct option is : b. When volume increases, but at a nonconstant rate.

Explanation:

Curvilinear costs is a type of expense that <u>does not increase at a constant rate with the production volume.</u> It tends to have a sudden increase at low production volumes, then remains constant in the middle and then increases at high production volumes.

The curvilinear costs does not increase linearly with the production. Therefore, curvilinear cost is also called a nonlinear cost.

<u>Therefore, curvilinear costs always increase at a nonconstant rate with the increase in the production volume.</u>

6 0
3 years ago
A competitive firm currently produces and sells 7,500 units of output at a price of $2.50 per unit. The firm's average fixed cos
saveliy_v [14]

Answer:

A. $-2,250

B. The firm should continue to operate in the short run because price is greater than average variable cost

C.The firm should exit in the long run because it is making losses

D. In the long run, prices would increase because in a competitive firm, price must equal average cost. As firms exit the industry, supply would fall and this would lead to an excess of demand over supply. As a result, price would rise

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

Profit = Total revenue - Total cost

( $2.50 -  $2.80) × 7,500 = $-2,250

The firm is earning a loss

A firm should shutdown in the short run if price is less than average variable cost.

Average variable cost = average total cost- average total cost

 $2.80 - $0.75 = $2.05

2.50 > 2.05 so the firm should continue to operate in the short run.

The firm should exit in the long run because it is making losses

In the long run, prices would increase because in a competitive firm, price must equal average cost

I hope my answer helps you.

3 0
3 years ago
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