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.
Answer:
$300
Explanation:
When insurance is paid in advance, the entries required are
Debit Prepaid Insurance
Credit Cash account
As time elapses and the insurance expires,
Debit Insurance expense
Credit Prepaid Insurance
Amount of insurance expense as at 31 December (6 months between 1 July and 31 December)
= 6/12 * $600
= $300
The insurance expense on the annual income statement for the first year ended December 31 is $300.
Answer: Constraint
Explanation:
The company data is not attached but this should be correct.
Constraints enable companies and entities to engage in sensitivity analysis which would enable them find out optimal quantities of production and production strategy.
Constraints show how much of something is needed to get something done so in making time the constraint, the company is trying to find out how much time is needed in the fabrication department for goods in order for profits to be maximized.
Answer:
Price of the bond is $940.
Explanation:
Price of bond is the present value of future cash flows. This Includes the present value of coupon payment and cash flow on maturity of the bond.
As per Given Data
As the payment are made semiannually, so all value are calculated on semiannual basis.
Coupon payment = 1000 x 11% = $110 annually = $55 semiannually
Number of Payments = n = 11 years x 2 = 22 periods
Yield to maturity = 12% annually = 6% semiannually
To calculate Price of the bond use following formula of Present value of annuity.
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond =$55 x [ ( 1 - ( 1 + 6% )^-22 ) / 6% ] + [ $1,000 / ( 1 + 6% )^22 ]
Price of the Bond = $55 x [ ( 1 - ( 1.06 )^-22 ) / 0.06 ] + [ $1,000 / ( 1.06 )^22 ]
Price of the Bond = $662.29 + $277.5
Price of the Bond = $939.79 = $940
