Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. early in 2012, dobbs corporation engaged kiner, in

Early in 2012, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization...

70.2K

Verified Solution

Question

Accounting

Early in 2012, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2012 and was completed on December 31, 2012. Dobbs made the following payments to Kiner, Inc. during 2012:

Date Payment

June 1, 2012 $4,800,000

August 31, 2012 7,200,000

December 31, 2012 6,000,000

In order to help finance the construction, Dobbs issued $4,000,000 of 10-year, 9% bonds payable, issued at par on May 31, 2012, with interest payable annually on May 31.

In addition to the 9% bonds payable, the only debt outstanding during 2012 was a $1,200,000, 12% note payable dated January 1, 2008 and due January 1, 2018, with interest payable annually on January 1.

Instructions

Compute the amounts of each of the following (show computations):

1. Weighted-average accumulated expenditures qualifying for capitalization of Interest cost _________________

2. Avoidable interest incurred during 2012. _______________

3. Total amount of interest cost to be capitalized during 2012. _______________

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

We always seem to be focused on using statistics in Business decisions. Please think of some...

Basic Math
Q

In ecology, a population is best defined as: A. all members of any one species living...

Biology
Q

Paper presentation on software defined radio and full report pdf

Electrical Engineering
Q

Please prove the following formally and clearly: Let X1 = 1. Define Xn+1 = sqrt(3 + Xn)....

Advance Math
Q

Please do not use this as an example: For example, let’s say you had four groups,...

Basic Math
Q

The force applied (F) to a wrench isdirectly related to the torque (T) of thewrench....

Basic Math
Q

as the standard normal distribution but it reflects the greater variability that is expected with...

Statistics
Q

Synthetic Division Divide 1 3 2v v 2 v 6 A v v 3 2...

Algebra
Q

The following information was drawn from the accounting records...

Accounting
Q

Thornton Industries began construction of a warehouse on July 1, 2024. The project was completed...

Accounting
Q

Check my work Date of issuance: Optionally redeemable beginning: Par value (gross proceeds): Number of...

Accounting
Q

Meaning of the change in current assets and non-current assets in 2 situations: - 1st...

Accounting