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nikklg [1K]
3 years ago
10

A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for

construction were as follows: January 1, $520,000; March 31, $620,000; June 30, $420,000; October 30, $660,000. To help finance construction, the company arranged a 9% construction loan on January 1 for $740,000. The company’s other borrowings, outstanding for the whole year, consisted of a $3 million loan and a $5 million note with interest rates of 10% and 6%, respectively. Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year.
Business
1 answer:
laila [671]3 years ago
5 0

Answer:

$108,975

Explanation:

According to the scenario, computation of the given data are as follow:-

We need to do following calculations

Average Accumulated Expenditures:-

Expenditures for Construction × (Number of Month ÷ Total Month)

1 January   $520,000 × (12 ÷ 12) = $520,000

31 March   $620,000 × (9 ÷ 12) = $465,000

30 June     $420,000 × (6 ÷ 12) = $210,000

30 October  $660,000 × (2 ÷ 12) = $110,000

Total Average Accumulated Expenditures = $1,305,000  

Now

Weighted Average Interest Rate is

= Total Amount of Loan × Total Value of Interest  

= $3,000,000 × 10%

= $300,000

$5,000,000 × 6%

= $300,000

Total  Amount of  Loan is

= $3,000,000 + $5,000,000

= $8,000,000

Total  Value of Interest

= $300,000 + $300,000

= $600,000

Weighted Average Interest Rate is

= Total Value of Interest ÷  Total Amount of Loan  

= $600,000 ÷ $8,000,000

= 0.075

= 7.5%

Amount of Interest Capitalization= is

Specific Borrowing Interest = $740,000 × 9% = $66,600

Excess Borrowing = (Total Average Accumulated Expenditures - Specific Borrowing)

= $1,305,000 - $740,000

= $565,000

Interest on Excess Borrowing = Excess Borrowing × Weighted Average Interest Rate

= $565,000 × 7.5%

= $42,375

Capitalized Interest = Excess Interest Borrowing + Specific Borrowing Interest

= $42,375 + $66,600

= $108,975    

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3 years ago
On September 1, Year 1, Gomez Company collected $9,000 in advance from a customer for services to be provided over a one-year pe
Margaret [11]

Answer:

d. $9,000; $9,000

Explanation:

As cash received on January 1 in advance to provide service in one year which is completed on December 31. So all the Unearned revenue is recognized because service for 12 month has been performed so whole amount will be reported in Income statement for the year ended December 31. Only cash received is from the service revenue activity so, it is also reported as $9,000. correct option is d. $9,000; $9,000.

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3 years ago
From theory, what are some communication channels and barriers? Now from professional experiences, what are some communication c
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Answer:

Communication channels are the channels with which information are passed from one to person to another. Messages and ideas are exchanged using these channels to complete the communication process.

Explanation:

Types of communication channels are:

Email

Social media

TelephoneTelevision

Radio

Face-to-face communication

Oral and written communication

Verbal and non-verbal communication.

Communication can be through the use of words or without words, such as the use of signs and gestures. Communication can take place physical and otherwise.

Barriers in communication this are the things that create disturbances in sent messages and thereby causing a misunderstanding between the sender and receiver.

Barriers are:

Poor communication skills: when an individual communication skill is weak, such individual lacks the confidence to communicate effectively in front of others.

Noise disturbance: Noise disturbance is a barrier that hampers the clarity of a message.

Language barriers: The language barrier occurs when there is diversity in an organization workforce. languages or accents differ fromLanguage to language same as cultures.

Perception differences: This occurs when the senders point of view and receivers doesn’t match up which results in lack of understanding.

Wrong pronunciation of words and poor usage of vocabulary: By not pronouncing words accurately and correctly, wrong message might be passed.

the communication channels in a professional settings are:

Formal communication: the use of written letters and e-mails to colleagues, senior management, or the exchange of thoughts through official presentations before board members.

Informal communication: this kind of message channel exist between acquittances people we are familiar with. Any style and words not suitable in formal communication mode can be used here.

Barriers at the professional level are:

Organizational Hierarchy: due to the long chain of hierarchy or it passes through this alters the original message.

Lack of knowledge of non-verbal communication: Body language, gestures and postures are essential factors of communication as a wrong gestures and postures communicate false messages.

Low confidence level: For am individual to be able face a crowd and pass effective communication he needs his confidence level high.

Clarity in the message: The message been passed must be clear, concise and simple. Free of grammatical and spelling errors.

High confidence level: a confident speakers communicates easily, which his message easy to grasp and understand.

Feedback: for a communication process to be complete the receiver must give a feedback.

Good communication skills:

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6 0
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Which of the following statements is true?a. A country cannot have comparative advantage in producing a certain item if it incur
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Answer:

. All countries can gain from trade if they all specialize in production according to comparative advantage

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Absolute advantage is when a country produces more quantities of goods and services than its trading partners.

A country can still have comparative advantage in production if opportunity cost is increasing once it's opportunity cost doesn't become greater than that of its trading partners.

A country can have comparative advantage without having absolute advantage.

I hope my answer helps you.

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Answer:

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