Questions for your assistance please #1 During 2013, Super Build Company constructed various...
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Accounting
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#1 During 2013, Super Build Company constructed various assets at a total cost of 800,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2013 were 500,000. The company had the following debt outstanding at December 31, 2013:
1. 10%, 5-year note to finance construction of various assets,
dated January 1, 2013, with interest payable annually on January 1
2. 12%, ten-year bonds issued at par on December 31, 2005, with interest payable annually on December 31
3. 9%, 3-year note payable, dated January 1, 2011, with interest payable annually on January 1
Instructions
Compute the amounts of each of the following (show computations).
1. Avoidable interest.
2. Total interest to be capitalized during 2013.
#2 On January 1, 2010, Shine Company purchased for 2,000,000 tea-making equipment having an estimated useful life of 10 years with an estimated residual value of 50,000. Depreciation is taken for the portion of the year the asset is used. Instructions Determine the depreciation expense for 2010 using the Double-declining balance method.
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