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raivynvieu6605
16.01.2020 •
Business
Pharoah company is constructing a building. construction began on february 1 and was completed on december 31. expenditures were $1,848,000 on march 1, $1,248,000 on june 1, and $3,019,800 on december 31.
pharoah company borrowed $1,112,400 on march 1 on a 5-year, 13% note to finance construction of the building. in addition, the company had outstanding all year a 10%, 5-year, $2,326,800 note payable and an 11%, 4-year, $3,400,300 note payable. compute avoidable interest for pharoah company. use the weighted-average interest rate for interest capitalization purposes. (round percentages to 2 decimal places, e.g. 2.51% and final answer to 0 decimal places, e.g. 5,275.)
avoidable interest 247439
hello i have posted the same qouestion since 2 hrs and it have been answered wrong, am so confused now. could anyone give me an accurate answer?
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Ответ:
Total avoidable interest
144,612 from specifit purpose + 131,249.14 other source = 263,810.14
Explanation:
First, we get the total capitalization which is an average of the expenditures considering their date
CONSTRUCTION INTERET CAPITALIZATION
Dateoutlayweightsubtotal
March 1 1,948,000.00 0.83 1,623,333.33
June 1 1,248,000.00 0.58 728,000.00
Dec 31 3,019,800.00 - -
Total Capitalization 2,351,333.33
now we apply the principal and rate for specifit use:
Specifit use to finance: 1,112,400
at 13% = 144,612
Finance trought other debts:
2,351,333.33 - 1,112,400 = 1,238,933.33
Now, we solve for the average rate of the other liabilities outstanding
average rate:
PRINCIPAL INTEREST
2,326,800at 10%232680
3,400,300 at 11% 374033
5,727,100 606713
Average rate: 606,713 / 5,727,100 = 0.105937211
And finally, we apply it to our remaining capitalization
Capitalized interest: 1,238,933.33 x 0.105937211 = 131,249.14
Total avoidable interest will be the sum of both concepts
144,612 + 131,249.14 = 263,810.14
Ответ:
$189,000
Explanation:
The computation of the amount of direct material available for use is shown below:
= Beginning balance of direct material + purchase of direct material
= $18,000 + $171,000
= $189,000
We simply applied the above formulas by adding the above two items so that the amount of direct material available for use could come