1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
stepan [7]
3 years ago
9

Sylvester Co. takes out a 12% loan of $500,000 on 1/1/2014 to finance construction of a building for the company’s own use. Cons

truction begins immediately, and $600,000 is spent on the construction at an even pace during 2014. Another $400,000 is spent at an even pace during 2015, with construction completed on 12/31/2015. No other construction loans are taken out. Sylvester incurred unrelated interest expenses of $10,000 and $15,000 in 2014 and 2015, respectively, on loans that bear interest at 10%. How much interest can Sylvester capitalize in 2014 and 2015?
Business
1 answer:
IRINA_888 [86]3 years ago
7 0

Answer:

2014 36,000

205: 24,000

Explanation:

500,000 x 12% = 60,000 construction realted per year

Capitalize:

timeline:

<--/--/--/--/--/--/--/--/--/--/--/--/-->

each month the company is doing an spending related to the construction. We must capitalize based on the amount investment.

The first month capitalize throught the whole year,

the second month 11 months

the third for 10 months and so on.

Therefore, the capitalize amount will be half of the cost of the year

2014: interest capitalized through the cost of construction

600,000/2 x 12% = 36,000

400,000/2 x 12% = 24,000

That's the maximum amount we can capitalize for construction.

You might be interested in
The cost to manufacture one unit of Killian Audio Products' best-selling hearing aid, the Zone, is $67.50. The CFO of the compan
ikadub [295]

Answer:

Economies of scale

Explanation:

Economies of scale refers to reducing total costs per unit by increasing total output. All companies have certain fixed costs, some companies have higher fixed costs than others, but they always exist. When you are producing something, the cost equation is production costs = variable costs per unit + average fixed costs per unit.

Variable costs vary directly with output, while fixed costs do not, e.g. salaries can be fixed, depreciation, rent, interests, etc. The higher the output, the lower the average fixed cost per unit.

Also, sometimes variable costs can also decrease as total output increases. E.g. you can get higher discounts for purchasing larger quantities of materials and supplies.

4 0
3 years ago
Incident managers begin planning for the demobilization process when:
vampirchik [111]
Incident managers begin planning for the demobilization process when B. INCIDENT ACTIVITIES SHIFT FROM RESPONSE TO RECOVERY.

Demobilization occurs when the incident objectives have been met. 

<span>Demobilization is the orderly, safe, and efficient return of all resources used in the incident to its original status and location. It must be done as soon as possible to facilitate accountability of the resources.</span>

5 0
3 years ago
A benefit of earning a salary instead of an hourly wage is
SCORPION-xisa [38]

B

Explanation:

An hourly wage is unfixed and can change depending on your ability but a salary doesn't change and ensures a continuous income

5 0
3 years ago
Read 2 more answers
A company has net income of $187,000, a profit margin of 8.6 percent, and an accounts receivable balance of $126,370. Assuming 6
NARA [144]

Answer:

35.35  days

Explanation:

For the computation of company’s days’ sales in receivable first we do the following calculations

As we know that

Profit margin = Net income ÷ Sales

0.086 = 187,000 ÷ Sales

Sales = 2,174,418.605

So,

Credit sales = Sales × Sales percentage

= 2,174,418.605 × 0.6

= 1,304,651.163

Receivables turnover ratio = Credit sales ÷ Receivables

= 1,304,651.163 ÷ 126,370

= 10.3241

Now

Days sales in receivables = 365 ÷ Receivables turnover

= 365 ÷ 10.3241

= 35.35 days

4 0
3 years ago
A large stock dividend:
Sladkaya [172]

Answer:

Results in a transfer of retained earnings to common stock and additional paid-in capital.

Explanation:

A stock dividend can be defined as the dividend which is distributed to shareholders on the basis of their percentage of ownership. Stock dividend is paid in form of shares and not in form of cash.

A stock dividend can also be described as a dividend payment paid by a company to its existing stakeholders from the profit or earnings that has been derived from the company during a financial year period.

The main advantage of stock dividend is that taxes will not be paid on the stock dividends until the shares have been sold.

5 0
3 years ago
Other questions:
  • A management trainee rotates through four of her company's six divisions in a year. Her rotation is determined by random selecti
    8·1 answer
  • An agent has recently changed his email address. What must the agent do to comply with the regulation for change of address?
    6·1 answer
  • During the adjusting process two transactions were missed. The first is for unearned rent revenue of which $450 was earned durin
    11·1 answer
  • Which of the following would not be an operations maangement function in a fast food restaurant?
    15·1 answer
  • which result is a positive aspect of globalization a.intense competition b. decreased profit margins c. increased cooperation co
    11·1 answer
  • Austin sound sold inventory for $ 300,000, terms 2​/10, ​n/30. cost of goods sold was $152,000. how much sales revenue will aust
    9·1 answer
  • The Allowance for Doubtful Accounts account has a year-end credit balance, prior to adjustment of $500. The bad debts are estima
    9·1 answer
  • Alexandria's Dance Studio is currently an all-equity firm with earnings before interest and taxes of $338,000 and a cost of equi
    11·1 answer
  • stock a has an expected return of 20%; stock b has an expected return of 5%, what is the ecpected return on a portfolio is compr
    14·1 answer
  • 4-1) Consider any organization you are aware of from work, study, or the media. How do they manage people? Do people in those or
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!