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nikdorinn [45]
3 years ago
12

Cole Co. began constructing a building for its own use in January 2016. During 2016, Cole incurred interest of $50,000 on specif

ic construction debt, and $20,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2016 was $40,000. What amount of interest should Cole capitalize?
Business
1 answer:
Stella [2.4K]3 years ago
4 0

Answer:

$40,000

Explanation:

The accounting procedure involved in the above is that one picks the lower between the actual interest incurred and the interest computed on the weighted average amount of accumulated expenditures for PPE.

The actual interest incurred on specific construction debt and other borrowings

= $50,000 + $20,000

= $70,000

Since the interest computed on the weighted average amount of accumulated expenditure for the building is $40,000 , the lower between the actual interest incurred and interest on weighted average amount of accumulated expenditure is $40,000, hence will be the capitalized amount.

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Daniels Transport has operating income of $68,200, interest expense of $210, dividends paid of $320, depreciation of $12,400, ot
Kisachek [45]

Answer:

Option (a) is correct.

Explanation:

Given that,

Operating income = $68,200

Interest expense = $210

Dividends paid = $320

Depreciation = $12,400

Other income = $2,100

common stock = $48,500 with a par value of $1 per share

Retained earnings = $29,700

Income before taxes:

= Operating income - Interest expense + Other income

= $68,200 - $210 + $2,100

= $70,090

Net income:

= Income before taxes - Taxes at 21%

= $70,090 - ($70,090 × 21%)

= $70,090 - $14,719

= $55,371

Shares of common stock outstanding:

= Common stock ÷ Par value per share

= $48,500 ÷ $1

= 48,500 shares

Earnings per share:

= (Net income - Preferred dividend) ÷ Shares of common stock outstanding = ($55,371 - 0) ÷ 48,500

= $1.14 per share

Therefore, the earnings per share if the tax rate is 21 percent is $1.14.

3 0
3 years ago
""The average daily rate charged by member banks for overnight loans of reserves" best describes the:"
Elodia [21]

Answer:

Federal funds rate

Explanation:

Federal funds rate is the interest rate at which commercial banks borrow and lend their excess reserves to each other overnight.

8 0
3 years ago
Suppose american winemakers convince the federal government to issue a directive to serve only domestically produced wine at gov
Sever21 [200]

Answer:

B) rent seeking behavior

Explanation:

Rent seeking behavior refers to actions carried out by businesses that try to seek benefits through government policies. In other words, the businesses will try to make the government give them some type of special treatment or special benefit at the expense of the general population.

In this case, the American winemakers were able to convince government officials to only serve domestic wine at government events. The problem is that the general population (taxpayers) are the ones that pay for that wine. American winemakers will benefit at the expense of the taxpayers.

4 0
3 years ago
The owners of Old School Brand Authentic Antique Foods researched Civil War records to come up with recipes used for the old-fas
andreyandreev [35.5K]

Answer:

Product

Explanation:

Marketing mix involves four elements

a. product

b. price

c. place

d. promotion

The statement given indicates that the recipe of cookies focuses on the product element of marketing mix.

6 0
2 years ago
Question 7 of 10
Ipatiy [6.2K]
D is the answer I’m sure of it
4 0
2 years ago
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