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solniwko [45]
2 years ago
13

To prepare for the construction of its new headquarters, Baker Co. purchased a 500-acre plot of land on August 5, Year 1. Baker

purchased the land using 25% cash and financed the balance using a 9% loan from First Bank. The company began preparation of the land for the construction of the building on January 30, Year 2. Which section of the authoritative guidance explicitly states whether the Year 1 interest on the bank loan qualifies for capitalization
Business
1 answer:
leonid [27]2 years ago
4 0

Answer:

FASB ASC 835-20-15-8

Explanation:

This section explicitly states that in order for interests to qualify for interest capitalization, the assets purchased through the loan must be getting ready for its intended use. E.g. if you want to capitalize the interests on the land, you must carry out activities necessary to prepare it for its intended use. Or if you purchase a machinery, you must be installing it in order to get it ready to produce.

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irga5000 [103]

Answer:

Quantity discounts can be taken advantage of for large lot sizes.

Explanation:

The EOQ model assumptions:

the order of one item does not intervene with the other.

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no losses or damage in transit

The EOQ does not consider the discount for large lot size, their formula does not consider the value of the goods:

Q_{opt} = \sqrt{\frac{2DS}{H}}

Its use: Demand of the good

cost of Setup, or ordering cost.

and Holding cost, the cost of keeping the inventory

There is no variable to account for discounts for order size in this method

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Makes sure an agenda is sent out before the meeting
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Hope that helps!

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KATRIN_1 [288]

Answer:

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SIDS falls under Sudden Unexpected Infant Death (SUID) which is the unexplained death of a child before investigation and as well as SIDS can include infections and accidental suffocation.

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