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solniwko [45]
3 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]3 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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Buff is considering a new packaging machine. The initial cost is $10,000 and we would save $4,000 per year in labor costs. If ou
vivado [14]

Answer:

NO

Explanation:

Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows

For the machine to be accepted, the total amount invested should be recovered in three years or less

Amount recovered = - cost of the project + discounted value of the cash flow

Amount recovered in year 1 = -10,000 + (4000 / 1.12) = -6,428.57

Amount recovered in year 2= -6,428.57 - (4000/ 1.12^2) = -3239.74

Amount recovered in year 3=  -3239.74 + (4000/ 1.12^3) = -392.62

the project would not be accepted because the amount invested would not be recovered within 3 years

8 0
2 years ago
What is the role of the Federal Reserve in the U.S. economy?
lys-0071 [83]

Answer: The correct answer:

A. Managing monetary policy.

5 0
1 year ago
Sasha, a production manager at ZestCorp Inc., must predict future labor demand using information about inventory levels from the
Olegator [25]

Answer:

Trend Analysis

Explanation:

Trend analysis pertains to categorizing and assigning statistical prototypes that indicate labor demand for the next business year. That is, forecasting your future labor need from past experience and statistical data. This gives Sasha a reasonable objective statistics from the past 3years which she will base her forecast on for the next year. These statistics are also called leading indicators. In this technique. Sasha is utilizing trend analysis to anticipate labor demand.

8 0
3 years ago
A classmate excitedly tells you of what he believes to be a good deal. He goes on and on about signing up for a free 30-day tria
Nikitich [7]

Answer:

reciprocity principle

Explanation:

A reciprocity principle is a form of socio-psychological principle in which individuals generally tend to pay back in good, and in any form of capacity for whatever favor they receive.

Hence, in this case, the music company is hoping the the "reciprocity principle" will work on consumers that subscribe to free music as they might wish to give back to the company based on consumers feeling indebted to them for all the free music that was streamed

8 0
2 years ago
12. Charlotte was not hungry that morning, so she just had a smidgen of cake at the office birthday party.
OLEGan [10]
The answer is C because smidgen means a small amount, and if she was not hungry then she would have only had a little bit.
6 0
3 years ago
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