xlschapter10

xlschapter10 - as follows (assuming the company already...

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Capitalization Weighted-average Amount Period Accum. Expend. January 1 acquisition 1,000,000 3/12 250,000 January 31 costs 200,000 2/12 33,333 February 28 costs 250,000 1/12 20,833 1,450,000 304,167 Weighted average interest rate of 10% 10.00% Weighted average qualifying costs 304,167 Interest capitalizABLE 30,417 Because the Company has $2 million of interest expense, the capitaizable interest is less than the amount of interest incurred and consequently, all of it can be capitalized
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Unformatted text preview: as follows (assuming the company already recorded all of the interest expense): Building 30,417 Interest expense 30,417 IF THE TOTAL INTEREST EXPENSE FOR THE PERIOD WAS $25,000, THEN ALL OF IT COULD BE CAPITALIZED, BUT NOT THE FULL AMOUNT OF THE 30,417 CAPITALIZABLE, IT WOULD BE: Building 25,000 Interest expense 25,000...
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