In-Lab 7 PP&E with solution

In-Lab 7 PP&E with solution - ACCT 401L Lab...

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ACCT 401L Lab Assignment #7 PPE Name____________________ Date 3/4/11 Problem 1: EXERCISE 10-7 McPherson Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2010. McPherson expected to complete the building by Dec 31, 2010. McPherson has the following debt obligations outstanding during the construction period. Construction loan-12%interest, payable semiannually, issued December 31, 2009 $2,000,000; Short-term loan-10% interest, payable monthly and principal payable at maturity on May 30, 2011, $1,600,000; Long-term loan-11% interest, payable on Jan 1 of each year. Principal payable on Jan 1, 2014 $1,000,000. Required: (carry all computations to two decimal places) (a) Assume that McPherson completed the office and warehouse building on December 31, 2010. As planned at a total cost of $ 5,200,000, and the weighted average of accumulated expenditures was $3,800,000. Compute the avoidable interest on this project.
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This note was uploaded on 02/22/2012 for the course ACCT 401 taught by Professor Winchel during the Spring '10 term at South Carolina.

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In-Lab 7 PP&E with solution - ACCT 401L Lab...

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