Calculate avoidable interest for the construction period

Assignment Help Financial Accounting
Reference no: EM131288057

On October 1, 2012 Flat Tire Brewery Co. began construction of a new brewery. The following expenditures were incurred for construction:

Oct. 1, 2012 $50,000 Nov. 1, 2012 680,000 Dec. 31, 2012 500,000 Feb. 1, 2013 600,000 Mar. 31, 2013 700,000

The building was completed and occupied on March 31, 2013, the last day of Flat Tire’s fiscal year. To help pay for construction $1,000,000 was borrowed on Sept 30, 2012 with a 10% (per year), nine month construction loan. The only other debt outstanding during the construction period was a ten year, $500,000, 6% (per year) note issued in 2009.

Hint: Because the entire construction period was within the same fiscal year, it is unnecessary to separately calculate 2012 and 2013 construction expenditures.

Instructions

(a) Calculate the weighted-average accumulated expenditures, rounding to the nearest month.

(b) Calculate avoidable interest for the construction period.

Reference no: EM131288057

Questions Cloud

Review applicable laws affecting collective bargaining : The Human Resources department has been tasked by the CEO to develop a training workshop on collective bargaining for upper management. Your department must analyze the obligations arising out of collective bargaining.
Evaluate the actions of the company in this situation : Dilemma: Brad Peters and his wife adopt a baby. Peters applies for 12-week family leave. He is denied because his wife did not give birth. How would you advise him to proceed?
Authorized to be ordered and were properly received : In order to ensure that a company pays only for goods which were authorized to be ordered and were properly received, the receiving clerk should _________the packing slip information with the open PO file to verify that the goods were________.
Incentivize a change initiative within current organization : You should create a 200-300 word response where you propose a plan to incentivize a change initiative within your current organization (or one with which you are familiar). You should specifically address:
Calculate avoidable interest for the construction period : The building was completed and occupied on March 31, 2013, the last day of Flat Tire’s fiscal year. To help pay for construction $1,000,000 was borrowed on Sept 30, 2012 with a 10% (per year), nine month construction loan. Calculate the weighted-aver..
Calculate avoidable interest for the construction period : The building was completed and occupied on March 31, 2013, the last day of Flat Tire’s fiscal year. To help pay for construction $1,000,000 was borrowed on Sept 30, 2012 with a 10% (per year), nine month construction loan. Calculate the weighted-aver..
Developing organizational capabilities : What are different approaches that firms have taken in developing organizational capabilities?
Analyze the past three years of the selected financial ratio : Analyze the past three years of the selected financial ratios for the company; you may obtain this information from the company's financial statements. Determine the company's financial health.
How might you characterize the effects in your film : Explain how the different categories of sound are being used in your chosen film - Assess the impact of sound in establishing the theme and how does the use of sound inform the mood of the scene, or the film overall?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Employer withhold in social security taxes for the year

Mahmet earned wages of $118,650 during 2014. He is single and claims two withholding allowances. How much will Mahmet's employer withhold in social security taxes for the year?

  Compute free cash flow and the cash flow adequacy ratio

Rollins Inc. is considering expanding its operations into different regions of the country. Compute free cash flow and the cash flow adequacy ratio. Comment on Rollins' ability to expand its operations.

  The first law on religious tolerance in the british

The first law on religious tolerance in the British North America; allowed freedom of worship for all Christians - including Catholics - in Maryland, but sentenced to death anyone who denied the divinity of Jesus.

  The current ratio as short-term liabilities

If a company decides to refinance the short-term liabilities to long term liabilities, they are no longer short-term liabilities. So do you feel they should still be included in the current ratio as short-term liabilities, why or why not?

  Illustrate what is the weakest point in this network

Illustrate what is the weakest point in this network on which forensic investigators should concentrate their efforts for determining whether money laundering is occurring?

  A history of the kings of kashmir

Who wrote the Rajatarangini, a history of the kings of Kashmir

  Buildings will generally be recorded in same ledger account

Golddigger Services Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $71,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a: What effect would th..

  Return on common stockholders equity-current ratio

The comparative statements of Osborne Company are presented here. OSBORNE COMPANY Income Statements For the Years Ended December 31 2014 2013 Net sales $1,895,647 $1,755,607 Cost of goods sold 1,063,647 1,011,107 Gross profit 832,000 744,500 Selling ..

  Question 1 backgroundcochlear limited is a publicly listed

question 1 backgroundcochlear limited is a publicly listed company on the asx australian securities exchange which

  To compute present value and internal rate of return for a

to compute present value and internal rate of return for a new product line.auntnbspnbsp sallys sauces inc. is

  Find accounts receivable turnover

Find the financial statements for 2 related/similar companies (Nike and reebok) and calculate the following ratios for each (note whether a particular ratio is not applicable):

  Construct from the data and prepare t accounts

Tom and Jerry equally contributed US$ 1,000,000 as their share of capital in the business on 1/1/2012. They decided to keep the capital in the Company's bank account.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd