Tangent Company is constructing a production complex that qualifies for interest capitalization. The following information...
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Accounting
Tangent Company is constructing a production complex that qualifies for interest capitalization. The following information is available:
Capitalization period: January 1, 2016, to June 30, 2017
Expenditures on project:
2016:
January 1
$ 648,000
May 1
369,000
October 1
600,000
2017:
March 1
1,392,000
June 30
588,000
Amounts borrowed and outstanding: $1.5 million borrowed at 10%, specifically for the project $8 million borrowed on July 1, 2015, at 12% $18 million borrowed on January 1, 2011, at 6%
Required:
Note: Round all final numeric answers to the nearest dollar.
Compute the amount of interest costs capitalized each year.
Capitalized interest, 2016
$
Capitalized interest, 2017
$
If it is assumed that the production complex has an estimated life of 25 years and a residual value of $0, compute the straight-line depreciation in 2017.
$
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