PPE_Problem_Solution

# PPE_Problem_Solution - 0.14 \$210,000 Total \$6,500,000...

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Q 1 A Land \$12,857,143 Building \$5,357,143 Depletable Natural Resource (or Silver Mine) \$26,785,714 Cash \$45,000,000 Q 1 B 1 2001 \$204,048 = (\$5,357,143-\$460,000)*5%*10/12 2002 \$244,857 = (\$5,357,143-\$460,000)*5% Q 1 B 2 2001 \$401,786 = \$5,357,143 * 5% * 1.8 * 10/12 2002 \$445,982 =(\$5,357,143-\$401,786) * 5% * 1.8 Q 1 C Depletion Expense (or Inventory) \$4,285,714 = 800,000 @ (\$26,785,714/5,000,000 Depletable Natural Resource (or Silver Mine) \$4,285,714 Q 2 1 Weighted Average Interest Rate 2001 \$2,000,000 0.12 \$240,000 (Nonspecific Debt) \$3,000,000 0.10 \$300,000 Total \$5,000,000 \$540,000 10.80% 9.90% Weighted Average Interest Rate 2002 \$2,000,000 0.12 \$240,000 (Nonspecific Debt) \$3,000,000 0.10 \$300,000 \$1,500,000
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Unformatted text preview: 0.14 \$210,000 Total \$6,500,000 \$750,000 11.54% 5.77% Weighted Average Expenditures 2001 \$1,600,000 1.00 \$1,600,000 0.09 \$1,400,000 0.73 \$1,018,182 11/12 \$1,000,000 0.27 \$272,727 0.08 Total \$4,000,000 \$2,890,909 Specific Debt \$1,000,000 8.25% \$82,500 Nonspecific Debt \$1,890,909 9.90% \$187,200 Capitalized Interest \$269,700 \$269,700 Ending Balance \$4,269,700 Weighted Average Expenditures 2002 \$4,269,700 1.00 \$4,269,700 \$2,000,000 0.67 \$1,333,333 \$1,000,000 0.17 \$166,667 Total \$7,269,700 \$5,769,700 Specific Debt \$1,000,000 4.50% \$45,000 Nonspecific Debt \$4,769,700 5.77% \$275,212 Capitalized Interest \$320,212 \$320,212 Ending Balance \$7,589,912...
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