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Sever21 [200]
2 years ago
10

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? Multiple Choice $20,000 $40,000 $50,000 $70,000
Business
1 answer:
il63 [147K]2 years ago
5 0

Answer:

The correct answer is 'Option (b)  

Explanation:    

Cole co. should compare between actual interest incurred on all the debts and the calculated interest on weighted average accumulated expenditure and lower of these two should be capitalized.

Actual interest incurred =$50,000+20,000 = $70,000

Calculated interest = $40,000

Lower of these two to be capitalized for the building during 2011= $40,000

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Tanzania [10]

Answer: A. Sales-type lease

Explanation:

A Sales type lease is one where the present value of all the lease payments of the Asset being leased is more than the cost/ carrying amount of the Asset.

The present value of the lease Payments is the Fair Value of the asset and as seen from the question, the fair value of the asset is more than the cost of the Asset. The lease will therefore be accounted for as a Sales type lease by the lessor.

It is worthy of note that this entry affects only the lessor.

7 0
3 years ago
Chez Fred Bakery estimates the allowance for uncollectible accounts at 1% of the ending balance of accounts receivable. During 2
steposvetlana [31]

Answer:

See below

Explanation:

Per the above information,

Ending account receivable balance = Beginning account receivable + Credit sales - Collections - Written off amount

$93,000 = Beginning account receivable + $108,000 - $142,000 - $130

$93,000 = Beginning accounts receivable - $34,130

Beginning accounts receivable = $93,000 + $34,130 = $127,130

So, the beginning account receivable would be;

The ending accounts receivable is computed as;

= $930 ÷ 1%

= $93,000

7 0
3 years ago
When the dollar appreciates relative to foreign currencies, it means that:?
Talja [164]
<span>When the dollar appreciates relative to foreign currency means that the exchange rate will favor the dollar and cause a decrease in the the price of imported goods. It also means that travel abroad from the U.S. to the relative countries will increase due to lowered costs.</span>
6 0
3 years ago
A price total of $1,500 is subject to a 5% sales tax. What is the amount due after tax? A. $1,625 B. $75 C. $1,750 D. $1,575
zloy xaker [14]
The answer to your question is D
3 0
3 years ago
Read 2 more answers
The following is a schedule of the projected unit sales of Western Company, which manufactures casual wear. Each unit sells for
Likurg_2 [28]

Answer:

The correct option is A,the fourth quarter budgeted revenue is $32500 as shown below.

Explanation:

The budgeted sales quantity for fourth quarter is 1300 units at $25 each.

From Economics equation of revenue equals price multiplied by quantity, the revenue for the fourth quarter is calculated below.

Revenue=P*Q

P=price=$25

Q=budgeted quantity=1300 units

Revenue=$25*1300

Revenue=$32500

The value of this revenue that would be collected in the same quarter is 75%*$32500 is $24375 while the balance of $8125 in the first quarter of the succeeding year.

This way cash flow planning in terms of matching capital payments with cash receipt is better enhanced.

7 0
3 years ago
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