Ch 10 HW - 1,070,000 * 10% * 500,000 * 6/12 Construction...

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Description  Debit   Credit  Land  680,000  Bonds Payable  350,000  Common stock  90,000  Premium on bonds  21,000  Paid in capital in excess of par  219,000  680,000 (cost of building) - 371,000 MV = 309,000 value assigned to common stock 309000-90000 (par value) = 219000 paid in capital in excess of par
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Direct material  320,000  Direct Labor  200,000  Inremental overhead (200,000*1.4)  280,000  Fixed costs (700,000*.35)  245,000  Total Expenditures  1,045,000  Interest charges capitalized  25,000  Total cost of self constructed equipment
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Unformatted text preview: 1,070,000 * 10% * 500,000 * 6/12 Construction loan 25000 * 6 month construction period * construction expenditures took place with three months remaining in the construction period Debt Principal Interest Rate Length Loan interest (asset interest capitalization ceiling) 500,000 10% 0.50 25,000 Asset Interest Capitalized (3/12 period pf time) 1,045,000 10% 0.25 26,125 Amount Capitalized 25,000 Interest Charge...
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Ch 10 HW - 1,070,000 * 10% * 500,000 * 6/12 Construction...

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