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Dafna11 [192]
3 years ago
15

Blossom Furniture Company started construction of a combination office and warehouse building for its own use at an estimated co

st of $11,000,000 on January 1, 2020. Blossom expected to complete the building by December 31, 2020. Blossom has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 $4,400,000 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 3,080,000 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 2,200,000Assume that Headland completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,197,700, and the weighted-average amount of accumulated expenditures was $3,781,600. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)Avoidable Interest $Compute the depreciation expense for the year ended December 31, 2018. Headland elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $298,200. (Round answer to 0 decimal places, e.g. 5,275.)Depreciation Expense $
Business
1 answer:
motikmotik3 years ago
6 0

Answer:

weighted average rate: 11.14%

capitalize interest (avoidable interest) 421,270.24‬ dollars

Explanation:

construction related loan:

4,400,000 12%  =     528,000

general use:

3,080,000 10%  =    308,000

<u>2,200,000</u> 11%  =   <u>  242,000</u>

9,680,000  1,078,000

weighted-average rate: 1,078,000 / 9,680,000 = 0.111363636 = 11.14%

capitalize interest:

weighted-average amount of accumulated expenditures x w/a rate:

3,781,600 x 11.14% = 421,270.24‬

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Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable
Rudik [331]

Answer: $92,880

Explanation:

The Gross Profit can be calculated by simply removing the cost from the sales amount.

It is stated that the additional processing will yield 10,000 bags of Premium Green and 3,600 bags of Green Deluxe, which can be sold for $7.55 and $5.55 per bag.

Sales figure is therefore,

= (10,000 * 7.55) + (3,600 * 5.55)

= 75,500 + 19,980

= $95,480

Subtracting the cost to get,

= 95,480 - 2,600

= $92,880

The total gross profit would is $92,880.

7 0
2 years ago
If a regulatory commission imposes upon a nondiscriminating natural monopoly a price that is equal to marginal cost and below av
denpristay [2]

Answer:

The correct answer is letter "D": The firm must be subsidized or it will go bankrupt.

Explanation:

A subsidy is a benefit given to an individual, business or institution, typically by the government. Subsidies are given to promote a social good or economic policy. The government usually provides subsidies in the form of cash or tax breaks, low-rate loans, and certain types of rebates.

In the example, as the commission sets the price of the monopoly products below the average total cost, it will be translated in losses. Then, a subsidy will be necessary to be provided otherwise the company will file for bankruptcy.

3 0
3 years ago
Consider the following costs incurred in a recent period:Direct Materials $33,000Depreciation on Factory Equipment $12,000Factor
asambeis [7]

Answer:

$37,000

Explanation:

The following costs were incurred in a recent period

Direct Materials $33,000

Depreciation on Factory Equipment $12,000

Factory Janitor's Salary $23,000

Direct Labor $28,000

Utilities for Factory $9,000

Selling Expenses $16,000

Production Supervisor's Salary $34,000

Administrative Expenses $21,000

Therefore, the total amount of period cost can be calculated as follows

Total amount of period costs = Selling expenses + administrative expenses

= $16,000 + $21,000

= $37,000

Hence the total amount of period costs for the above period is $37,000

4 0
2 years ago
Read 2 more answers
The business purchased an office rack from Zuhdi Bhd for RM8,000 and
bezimeni [28]

Answer and Explanation:

The Journal entries are shown below:-

Office equipment Dr, RM8,000

               To Cash RM3,000

               To Accounts payable RM5,000

(Being purchase of office equipment is recorded)

Here we debited the office equipment as it increased the assets and credited the cash and account payable as it decreased the assets and increased the liabilities

6 0
3 years ago
EA1.
Klio2033 [76]

Answer:

22,600 units

Explanation:

The computation of the units started is shown below:

Ending work in process inventory units = Beginning  work in process inventory units + units started - units completed and transferred

1,100 units = 0 units + units started - 21,500 units

1,100 units = units started - 21,500 units

So, the units started units would be

= 1,100 units + 21,500 units

= 22,600 units

4 0
3 years ago
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