chapter 10 question solutions

chapter 10 question solutions - Chapter#10 Class and...

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Chapter#10 Class and Homework problems: BRIEF EXERCISE 10-2 Expenditures Date Amount Capitalization Period Weighted-Average Accumulated Expenditures 3/1 $1,500,000 10/12 $1,250,000 6/1 1,200,000 7/12 700,000 12/31 3,000,000 0 0 $5,700,000 $1,950,000 BRIEF EXERCISE 10-3 Principal Interest 13%, 5-year note $2,000,000 $260,000 15%, 4-year note 3,500,000 525,000 $5,500,000 $785,000 Weighted-average interest rate = $785,000 = 14.27% $5,500,000 BRIEF EXERCISE 10-4 Weighted-Average X Interest = Avoidable Accumulated Expenditures Rate Interest $1,000,000 12% $120,000 950,000 14.27% 135,565 $1,950,000 $255,565 EXERCISE 10-1 (15–20 minutes) Item Land Land Improvements Building Other Accounts (a) ($275,000) Notes Payable (b) $275,000
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(c) $ 8,000 (d) 7,000 (e) 6,000 (f) (1,000) (g) 22,000 (h) 250,000 (i) 9,000 (j) $ 4,000 (k) 11,000 (l) (5,000) (m) 13,000 (n) 19,000 (o) 14,000 (p) 3,000 EXERCISE 10-2 (10–15 minutes) The allocation of costs would be as follows: Land Building Land $400,000 Razing costs 42,000 Salvage (6,300) Legal fees 1,850 Survey $ 2,200 Plans 68,000 Title insurance 1,500 Liability insurance 900 Construction 2,740,000 Interest 170,000 $439,050 $2,981,100 EXERCISE 10-8 (20–25 minutes) (a) Computation of Weighted-Average Accumulated Expenditures Expenditures Date Amount X Capitalization Period = Weighted-Average Accumulated Expenditures March 1 $ 360,000 10/12 $ 300,000
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June 1 600,000 7/12 350,000 July 1 1,500,000 6/12 750,000 December 1 1,500,000 1/12 125,000 $3,960,000 $1,525,000 Computation of Avoidable Interest
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This note was uploaded on 02/25/2009 for the course ACC 0220 01 a taught by Professor Hutch during the Spring '09 term at Rosemont.

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chapter 10 question solutions - Chapter#10 Class and...

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