Answer:
$4.5
Explanation:
Interest to be capitalized=$90*6%*10/12=$4.5
As the loan was outstanding from January to October 2021, therefore interest is worked out for 10 months.
Please note that interest of only those debt instruments are capitalized which have been obtained to finance any construction project under the specific interest method.
In our example $90 is the construction loan therefore only this loan's interest is capitalized.
Social Security and Medicare benefits to elderly and retired people.
Answer:
the bad debt expense is $6,830
Explanation:
The computation of the bad debt expense is shown below:
= Estimated uncollectible amount + debit balance of allowance for doubtful accounts
= $6,300 + $530
= $6,830
Hence, the bad debt expense is $6,830
We simply added the above amount as it represent the bad debt amount
The same is to be considered
The existence of pre-tax cost of debt and post-tax cost of debt is due
to the acknoledgement of the tax benefit from issuing debt.There is no
tax benefit from paying divdends,so it makes no sense talking about
pre-tax,post-tax cost of equity for a firm.When you think about cash
flow to equity you can only assume that the taxes owed by the company
have already been paid.Now, the taxation over the income of the
shareholder is a whole different issue that does not take place in this
discussion,since it is not taken in consideration either in cost of
equity or cost of debt.
