Compute avoidable interest incurred during 2014, Cost Accounting

Assignment Help:

Early in 2014, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2014 and was completed on December 31, 2014. Dobbs made the following payments to Kiner, Inc. during 2014:
Date Payment
June 1, 2014 $6,000,000
August 31, 2014 9,000,000
December 31, 2014 7,500,000
In order to help finance the construction, Dobbs issued the following during 2014:
1. $5,000,000 of 10-year, 9% bonds payable, issued at par on May 31, 2014, with interest payable annually on May 31.
2. 1,000,000 shares of no-par common stock, issued at $10 per share on October 1, 2014.
In addition to the 9% bonds payable, the only debt outstanding during 2014 was a $1,250,000, 12% note payable dated January 1, 2010 and due January 1, 2020, with interest payable annually on January 1.
Instructions

Computer the amounts to each of the following (show computations):
1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost.
2. Avoidable interest incurred during 2014.
3. Total amount of interest cost to be capitalized during 2014

 


Related Discussions:- Compute avoidable interest incurred during 2014

Direct materials total variance, Direct Materials Total Variance Direc...

Direct Materials Total Variance Direct materials total variances refer to the difference between the standard direct material cost of the actual production volume and the actu

Budgetary planning and budgetary control, Difference between budgetary plan...

Difference between budgetary planning and budgetary control

Comment on the cash- flow impacts, Chester & Wayne is a regional food distr...

Chester & Wayne is a regional food distribution company. Mr. Chester, CEO, has asked your assistance in preparing cash-flow information for the last three months of this year. Sele

Marginal costing and break evan point analysis, what is marginal costing an...

what is marginal costing and explain concept of marginal costing

Case study, A family in Cambridge received their Christmas presents from fr...

A family in Cambridge received their Christmas presents from friends in Paris this week – 50 days after their parcel was posted. French posties sent it to Cambodia, and the near-20

Business and the generation of accounting standards, This time of year we a...

This time of year we all here about football. For me it is the bad news of how poorly the Buffalo Bills are performing. Hopefully your favorite team is doing well. One thing we

Labour variances, Labour Variances From our basic data, we can ca...

Labour Variances From our basic data, we can calculate the labour variances as given as: i. Labour Rate Variance = (AH x AR) - (AH  x SR)

Calculate cost of direct manufacturing labour, Dixon Corporation was establ...

Dixon Corporation was established on January 1, Year 1.  The firm has 2 divisions, Division A and Division B.  Division A manufactures standard carpets, and Division B manufactures

Support department allocation, how do you allocate the support department c...

how do you allocate the support department costs to production departments using the direct method when given percentages

Write Your Message!

Captcha
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