Exercise 11-11 Capitalizing interest (LO 11-2)
Kobe Company began constructing a building for its own use in February 20X1. During 20X1, Kobe incurred interest of $70,000 on specific construction debt and $15,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 20X1 was $60,000.
Required:
1a. What amount of interest should Kobe capitalize?
1b. Prepare the journal entry to record payment of the interest.
2. If interest computed on the weighted-average amount of accumulated expenditures for the building during 20X1 was instead $90,000, what amount of interest should Kobe capitalize?
Answers
1a. Kobe should capitalize $60,000 of interest.
1b. The journal entry to record payment of the interest would be:
Interest Expense 60,000 and Interest Payable 60,000
2. Kobe should still capitalize $70,000 of interest.
What is an interest?
1a. The amount of interest that Kobe should capitalize is the lesser of the actual interest incurred on the specific construction debt, which is $70,000, and the amount of interest computed on the weighted-average amount of accumulated expenditures, which is $60,000. Therefore, Kobe should capitalize $60,000 of interest.
1b. The journal entry to record payment of the interest would be:
Interest Expense 60,000
Interest Payable 60,000
2. If interest computed on the weighted-average amount of accumulated expenditures for the building during 20X1 was instead $90,000, Kobe would still only capitalize the lesser of the actual interest incurred on the specific construction debt, which is $70,000, and the amount of interest computed on the weighted-average amount of accumulated expenditures, which is $90,000. Therefore, Kobe should still capitalize $70,000 of interest.
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Related Questions
Which of the following might be part of a business case in favor of the mount lemmon fire district hiring employees with a broader range of ages
Answers
The option that demonstrates a business case in favor of the Mount Lemmon fire district hiring employees with a broader range of ages is: Firefighters who are older might also have more valuable experience.
A business case that favors an entity is one that is beneficial to the growth of the business.
When a business decides to hire individuals from a younger age bracket to an older age bracket, they are doing this not just to suit the law but to also benefit themselves. If the older firefighters have more experience on the job, then they have more capable hands to help their business.So, hiring older firefighters with more experience might be a purpose of hiring employees with a broader age range.
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What is meant by the concept entrepreneur?
Answers
Answer: An entrepreneur is someone who has an idea and who works to create a product or service that people will buy, as well as an organization to support that effort.
Explanation: An entrepreneur takes on most of the risk and initiative for their new business, and is often seen as a visionary or innovator.
Jake discovers that no flood insurance rate map (FIRM) is available in Lower Riverton, where he has just purchased a home. However, he can obtain a flood hazard boundary map (FHBM) that
Answers
If Jake issued flood insurance on real estate situated in flood areas, an ideal insurable risk may have been violated as the loss should not be catastrophic.
What is flood insurance?Flood insurance provides coverage for losses caused directly by flooding. Any buildup of water on typically dry terrain that impacts at least two acres of land or two or more properties is known as a flood.
For instance, the harm caused by a sewage backlog that resulted directly from flooding would be paid.
Thus, If Jake issued flood insurance on real estate situated in flood areas.
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Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.40 per card, and the cost of printing is $0.10 per card. The company receives $3.75 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,300 and standard deviation 200. (Assume these four are independent.)
What is the optimal production quantity for the card?
Answers
Answer:
≈ 9644 quantity of card
Explanation:
given data:
n = 4 regions/areas
mean demand = 2300
standard deviation = 200
cost of card (c) = $0.5
selling price (p) = $3.75
salvage value of card ( v ) = $ 0
The optimal production quantity for the card can be calculated using this formula below
= u + z (0.8667 ) * б
= 9200 + 1.110926 * 400
≈ 9644 quantity of card
First we have to find u
u = n * mean demand
= 4 * 2300 = 9200
next we find the value of Z
Z = ( \(\frac{p-c}{p-v}\) )
= ( 3.75 - 0.5 ) / 3.75 = 0.8667
Z( 0.8667 ) = 1.110926 ( using excel formula : NORMSINV (0.8667 )
next we find б
б = 200\(\sqrt{n}\) = 400
Aaron Mahnke is the host of Lore, which posts true life scary stories biweekly. Users love Lore because they enjoy listening to scary stories. Marketers like Lore because they can
sponsor content and become affiliated with this popular show. Users can access Lore by going onto the site and accessing the audio content, or they can subscribe through iTunes
and receive new content automatically. Lore is most likely a
a.widget.
b. social network.
O c. virtual game.
d. video sharing site.
e. podcast.
Answers
what is changing risk
Answers
Answer:
here:
Explanation:
A change risk is the probability that a change program will not reach its stated objectives and goals. There is a wide range of factors that will increase the change risk for a project, and so it is important to conduct an effective risk change assessment to understand, document, and reduce these change risks.
The US Senate overwhelmingly passed the 2022 Defense Authorization Act. The $768 billion "Defense Authorization Act" not only exceeds the defense spending proposed by the Biden administration by $25 billion, but also increases the US defense budget by about 5% compared to last year.
Answers
The US Senate passed the 2022 Defense Authorization Act, a $768 billion bill that surpasses the Biden administration's defense spending proposal by $25 billion and represents a 5% increase in the US defense budget compared to the previous year.
1. The US Senate passed the 2022 Defense Authorization Act.
2. The Defense Authorization Act is a bill that determines the budget and expenditures for the US defense sector.
3. The total amount allocated for the Defense Authorization Act is $768 billion.
4. The defense spending proposed by the Biden administration was exceeded by $25 billion in this Act.
5. The Act represents a 5% increase in the US defense budget when compared to the previous year.
6. This increase in the defense budget indicates a commitment to strengthening the country's defense capabilities.
7. The Act was passed overwhelmingly, indicating strong support from the Senate.
8. The Defense Authorization Act is an essential piece of legislation that ensures the funding and resources necessary for the US military to carry out its operations effectively.
9. The Act covers various aspects of defense spending, including military personnel, equipment, research and development, and strategic initiatives.
10. By passing the Defense Authorization Act, the US Senate has demonstrated its commitment to national security and defense preparedness.
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Two companies are having a dispute over a broken real estate
contract. They argue the dispute in front of a neutral third
party, who makes a ruling in favor of one side. This is an
example of _____
O A. mediation
B. negotiation
C. arbitration
D. conciliation
Answers
Answer:
C. Arbitration
Explanation:
It heans to have an independent unbiased person settle a dispute
The two companies have a dispute over a broken real estate contract. They argue the dispute in front of a neutral third party, who makes a ruling in favor of one side. This is an example of arbitration. Thus option (C) is correct.
What is arbitration?Arbitration is a method of dispute resolution in which parties to a dispute agree to have their case heard and decided by one or more independent arbitrators, rather than by a court of law.
In arbitration, the arbitrators listen to evidence presented by both sides and make a binding decision based on the facts and the applicable law. Arbitration can be used to resolve a wide range of disputes, including commercial disputes between businesses, disputes between employers and employees, and disputes between individuals.
When the dispute of two companies is resolved by neutral third party is an example of arbitration. Therefore, option (C) is correct.
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***ECONOMICS***An investment that you bought for ______
and sold for _____
made a profit.
A. $500; $400
B. $400; $500
C. S500; $300
D. $400; $300
Answers
Answer:
B.
Explanation:
you bought it for 400 and sold it for 500 and made 100$ profit
During the test, the proctor should: (Check all that apply.) Stop sharing the proctor’s video. Unmute the proctor’s audio only if there is a test taker problem to resolve. Step away from the computer for a brief break. Closely monitor any behaviors that would violate the testing rules.
Answers
During the test, the proctor should:
Stop sharing the proctor's video.Unmute the proctor's audio only if there is a test taker problem to resolve.Closely monitor any behaviors that would violate the testing rules.What does the Proctor have to do?The proctor stepping away from the computer for a brief break is not typically a responsibility or action expected during a test.
Proctors are generally expected to remain attentive and actively monitor the testing session.
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Which groups of people are eligible for Medicare?
A. People over 65 who live below the poverty level only
B. People over 65 only
C. People who live below the poverty level
D. People over 65 and people with disabilities
Answers
I am better at my job than most of the other people who have the same job title agree or disagree
Answers
Disagreed. You cannot say that you are better at your job than others who have the same job title.
How to answer questionnaire questions?While providing the answer to a questionnaire, it is very important that a person would try to be as truthful as possible.
The reason they have to be truthful is so that they would be able to give the best answer that would be useful for the research.
In a question like this, I used disagreed because it is not possible that you have met all of the persons that have the same job description as you do.
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When you set up an informational interview, you need to think about your objectives. For one thing, you want to gain ____________
from the person that you’re interviewing to help you learn about the career field. The questions that you choose to ask will help you learn the information that interests you most. You can also ____________
which will help you have a better chance of receiving a job offer in the future. You can follow up with this individual and learn about positions that become available.
Answers
Answer:
Firsthand information, Expand your professional network
Explanation:
Plato
When referring to the size and scope of business, which option should be included?
Wholesale vs. Retail
For-Profit vs. Nonprofit
Domestic vs. Global
Public vs. Private
Answers
GT Grand, a manufacturer of ultra-luxury cars, supplies customized vehicles based on the specific demands of customers in affluent market segments. The company's approach is most likely referred to as ________.
Answers
The approach of the company for affluent market segments is known as target marketing.
The following information related to target marketing is:
Target marketing is the marketing where the company wants to sell its products to the end consumers. It is the marketing where the entire market should be broken down into various things and the planning is to be done accordingly.Therefore The approach of the company for affluent market segments is known as target marketing.
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Listed below are selected transactions of Schultz Department Store for the current year ending December 31.
1. On December 5, the store received a deposit from the Selig Players to be returned after certain furniture to be used in stage production was returned on January 15. $ 500
2. During December, cash sales were received, which include the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. $ 798,000
3. On December 10, the store purchased for cash three delivery trucks. The trucks were purchased in a state that applies a 5% sales tax. $ 120,000
4. The store sold 25 gift cards for $100 per card. At year-end, 20 of the gift
cards are redeemed. Schultz expects three of the cards to expire unused.
Number of gift cards sold 25
Value of each gift card $ 100
Number of cards unredeemed at year-end 20
Number of cards expected to expire unused 3
Instructions
Prepare all the journal entries necessary to record the transactions noted above as they occurred and any adjusting entries relative to the transactions that would be required to present fair financial statements at December 31. Date each entry. For simplicity, assume that adjusting entries are recorded only once a year on December 31.
NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into the yellow shaded input cells.
Debit Credit
1. Dec.5
2. Dec. 1 - 31
3. Dec. 10
4. Dec. 31
Dec. 31
Answers
The journal entry of Department Store for the current year ending December 31 is given below:
What are journal entries?Journal entries are the entries made to document the transactions carried out by the company. The books of accounts have a record of every dollar that comes in and goes out. The transactions that are documented are in the book of accounts and are examined and audited for surplus payments or deficits, which are the most frequent errors to be discovered over recording, after they have been made. Below are the diary entries related to the context that are attached.
Date Particular Amount (Dr) Amount(Cr)
1 Dec 2005 cash 500 500 2 Dec 31 cash 798,000
Sales 760,000
Sales Taxes Payable 38,000
(Being sales recorded)
3. Dec 10 Delivery Truck 126,000
cash 126,000 4. Dec 31 cash 126000
Sales 2500
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7 the follow table contains the demand from the last 10 months :
Answers
Explanation:
Month Actual Demand Month Actual Demand
1 31 6 36
2 34 7 38
3 33 8 40
4 35 9 40
5 37 10 41
Show Work and answer the following:
a.) calculate the single exponential smoothing forcast for these data using a of .30 and an initial forecast ( F1) of 31.
b.) calculate the exponential smooting with trend forecast for these data using an a of .30, & of .30, and an initial trend forecast ( T1) of 1, and an initil exponentailly smoothed forecast F1 of 30,
c.) calculate the mean absolute deviation (MAD0 for each forecast
f Honduras is open to international trade in oranges without any restrictions, it will import
tons of oranges.
Suppose the Honduran government wants to reduce imports to exactly 100 tons of oranges to help domestic producers. A tariff of
$
per ton will achieve this.
A tariff set at this level would raise
$
in revenue for the Honduran government.
Answers
Suppose that Honduras is open to international trade in oranges without any restrictions, it will import an infinite amount of oranges. Therefore, the import of oranges can be limited through a tariff. The Honduran government wants to reduce imports to exactly 100 tons of oranges to help domestic producers.
A tariff of $720 per ton will achieve this. A tariff set at this level would raise $72,000 in revenue for the Honduran government.
Tariff: It is a tax imposed by a government on imported or exported goods. The main purpose of a tariff is to limit imports and protect domestic production and employment.
In this scenario, a tariff is imposed by the Honduran government to limit the import of oranges and help domestic producers. Therefore, if the tariff is set at $720 per ton, then it would reduce the imports of oranges to exactly 100 tons, which is the desired goal of the Honduran government.
Moreover, the tariff rate multiplied by the number of imports gives the amount of revenue raised by the Honduran government, which is $720 × 100 = $72,000. Thus, a tariff set at $720 per ton will raise $72,000 in revenue for the Honduran government.
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a business loan is substantively no different than other types of debt such as student loans or a home mortgage.
Answers
The following statement "a business loan is substantively no different than other types of debt such as student loans or a home mortgage" is true.
Although they have different meanings, the phrases "mortgage" and "home loan" are sometimes used synonymously. An acquisition loan known as a mortgage is one that is backed by the asset being purchased, the property. A mortgage product used particularly to buy a home is known as a home loan.
However, the bank or mortgage company does not actually own your home; rather, they just have a stake in the property and the mortgage note. The mortgage loan's security is thought to be your house. You are the property's legitimate owner as long as you repay your mortgage in line with the conditions.
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Impact of Fast Fashion on consumer behaviour’s
Answers
Fast fashion has led to increased consumer demand, shorter product life cycles, and unsustainable consumption patterns, contributing to environmental and social impacts.
The impact of fast fashion on consumer behaviors can be significant and has several implications:
Increased Consumption: Fast fashion promotes a culture of constant buying and frequent clothing turnover. Consumers are encouraged to purchase more items due to low prices and the perception of fast-changing trends.Impulse Buying: Fast fashion relies on creating a sense of urgency and scarcity, leading to impulse purchases. Consumers may buy items they don't necessarily need or truly want.Disposability Mindset: Fast fashion contributes to a mindset of disposable clothing. Consumers may view garments as short-term, leading to a decrease in care and quality expectations.Environmental Impact: The high demand for fast fashion results in excessive resource consumption, pollution, and waste generation. The production processes and disposal of clothing have significant environmental consequences.Ethical Concerns: Fast fashion is associated with unethical labor practices, such as exploitation of workers in low-wage countries, poor working conditions, and human rights violations.These factors combined can lead to overconsumption, waste, environmental degradation, and social issues within the fashion industry.
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. People Who Have Some College Education Fiftythree percent of all persons in the U.S. population have at least some college education. Choose 10 persons at random. Find the probability that a. Exactly one-half have some college education b. At least 5 do not have any college education c. Fewer than 5 have some college education
Answers
The U.S. resident population increased by 0.4%, or 1,256,003, to 333,287,557 in 2022 following a historically low rate of change between 2020 and 2021.
What is the likelihood that one-half have some college education?
There is a 17.3425% chance that half of the population has some college education. Therefore, the Binomial distribution will be used to solve the problem. A person is more likely to have at least some college education if their probability is p = 63%, or 0.63.
Education in a college setting is defined as taking classes at a university that offers a bachelor's degree or higher, or at a university that offers a minimum of a two-year program that can be used to fulfill all the requirements for that degree.
In relation to India, the term "higher education"
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If the marginal cost of a single firm is given by MC=2Q+1, find the horizontal summation if there are ten firms
Answers
In economics, an increase in production quantity causes an adjustment to the total cost known as the marginal cost, sometimes known as the cost of producing more. When there are 10 firms, the horizontal summation would be Q - 5P - 5, as the marginal cost of a single firm is given by MC=2Q+1.
Why do you use the term marginal cost?The marginal cost can be used by businesses to assess how the volume produced affects the cost and, ultimately, earnings. The expense spent by a business when it has to produce more units of any goods or services is known as a marginal cost. It is computed by deducting the full cost of producing the extra goods and dividing that amount by the change in the total quantity of the goods produced. The marginal cost of manufacturing is another name for it.
Given:
MC = 2Q + 1
For a single firm P = MC
P = 2Q + 1
2Q = P - 1
Q = 0.5P - 0.5
When they are 10 firms,
(0.5P - ).5)10
Q - 5P - 5 ( Horizontal summation)
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New Venture Management (1)
1. Explain the below the process of financial management.
*. Importance of Financial Statements - Preparation of historic Financial statements
*. Forecasts - Preparation of Forecasts
*. Budgets - Preparation of pro forma financial statement
*. Financial Ratios - Ongoing analysis of financial results
Answers
The process of financial management involves the preparation and analysis of historic financial statements, forecasts, budgets, and ongoing monitoring of financial ratios.
The process of financial management involves several key components that contribute to effective financial decision-making and the overall financial health of a business. Here is an explanation of each component:
Importance of Financial Statements - Preparation of Historic Financial Statements:
Financial statements, such as the income statement, balance sheet, and cash flow statement, provide a historical snapshot of a company's financial performance, position, and cash flows. These statements are crucial for assessing profitability, liquidity, solvency, and overall financial stability. By analyzing past financial statements, management can identify trends, evaluate the impact of previous decisions, and make informed decisions for the future.
Forecasts - Preparation of Forecasts:
Forecasts involve projecting future financial performance based on historical data, market trends, and other relevant factors. This process helps businesses anticipate potential opportunities, challenges, and financial needs. Forecasts typically include projected income statements, balance sheets, and cash flow statements, providing insights into expected revenue, expenses, assets, liabilities, and cash flows. It enables management to plan and allocate resources effectively, set financial goals, and make strategic decisions.
Budgets - Preparation of Pro Forma Financial Statements:
Budgets are financial plans that outline anticipated income, expenses, and cash flows for a specific period, typically on a monthly, quarterly, or annual basis. Pro forma financial statements, including pro forma income statements, balance sheets, and cash flow statements, are created as part of the budgeting process. Budgets help in setting targets, allocating resources, and monitoring performance against the planned financial objectives. They serve as a roadmap for financial management and aid in identifying areas that require adjustment or improvement.
Financial Ratios - Ongoing Analysis of Financial Results:
Financial ratios are quantitative indicators that provide insights into a company's financial performance, efficiency, and profitability. Ratios compare different financial figures from the financial statements to assess liquidity, profitability, solvency, efficiency, and other key aspects. By monitoring and analyzing financial ratios on an ongoing basis, management can identify trends, compare performance against industry benchmarks, and make informed decisions to optimize financial performance. These components contribute to understanding a company's financial position, making informed decisions, and driving sustainable growth and profitability.
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Is the following scenario a partnership? Performing in a twenty-piece band with a rotating showcase of trumpeteers.
No
Yes
Answers
(2+45) + [(+3) + (-4)] + {(+6) + [(-14) + (-13) + (+9)] + (-17)}
Can someone please help me to do this step by step? :(
Answers
Answer:
10
Explanation:
first solve in parenthesis
2+45) + [(+3) + (-4)] + {(+6) + [(-14) + (-13) + (+9)] + (-17)}
46+(-1)+(-35)
46-1-35
10
hope this helps
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The importance of formal planning in organizations has grown dramatically. Companies have found that they can achieve competitive advantage through the formal six-step strategic planning process. Answer questions about how Ron Shaich and Panera Bread use this strategic process. Planning is not an informal or haphazard response to a crisis; it is a purposeful effort that is directed and controlled by managers and often draws on the knowledge and experience of employees throughout the organization. Because planning is an important management function, managers at all three levels use it. To be fully effective, the organization's strategic, tactical, and operational goals and plans must be aligned. The strategic management process has six major components, beginning with the establishment of the mission, vision, and goals of the company and ending with strategic control.
The narrator describes how someone creates the mission while someone else identifies the steps that make the mission happen. The steps are known as what?
a. Top of Form
b. strategic vision
c. strategy stepping
d. strategic mapping
e. strategic controls
f. strategy implementation
Answers
Explanation:
Strategic planning is important to an organization because it provides a sense of direction and outlines measurable goals. Strategic planning is a tool that is useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward.
Describe why the facility should have an inventory
list of equipment.
Answers
so people don't buy the same things again & again
to see
whats in stock
where they are displayed
how many they have
keep track of inventory
plan for restocking
know which items are running low
asset value for accounting or financial purposes.
Overall, an inventory list of equipment is a fundamental tool for facility management, providing comprehensive oversight, efficient maintenance planning, cost control, compliance adherence, emergency preparedness, and facilitating decision-making processes. It streamlines operations, enhances asset management, and contributes to the overall productivity and functionality of a facility.
Keeping Track: An inventory list helps facility managers know what equipment they have and where it is located.
Taking Care: The list helps plan when to fix or maintain equipment so it stays in good condition.
Saving Money: By knowing what equipment they have, managers can avoid buying things they don't need and spend money wisely.
Following Rules: Some facilities have rules to follow, and the inventory list helps managers keep track of important things like safety checks and paperwork.
Being Ready for Emergencies: The inventory list helps managers know which equipment is important during emergencies like fires or storms.
Planning and Buying: The inventory list helps managers decide what new equipment to buy and make a budget.
Talking to Insurance and Money People: The inventory list helps when talking to insurance or money people because it shows what equipment the facility has and how much it's worth.
provides information about the administrative and clinical machines in the facility.
gives you more control over your business' assets.
equipments inventory list provides information about the administrative and clinical machines in the facility. This information is used by the provider, supervisor, and/or accountant for future planning and tax paperwork
During December, Acme, Inc., performed and billed its customers $27,000 for services on account of which it collected $9,000. How much revenue should Acme record in December?
Answers
The amount of revenue that should be recorded by Acme Inc, given the amount billed to customers is $ 27, 000.
How much should be revenue ?Revenue is the amount that a company recognizes when they sell goods or provide services. As per the Accrual basis, this amount is to be recognized even when the cash has not been paid so long as the services have been given or the goods provided.
The revenue that Acme Inc would then need to recognize is the amount that it billed its customers on account which is $ 27, 000.
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Many Arab countries have a larger underground sector of the economy relative to developed countries. What effect would this have on the GDP of Arab countries?
Understate (reduce) the GDP of Arab countries,
Ob It has no effect on measuring the GDP of Arab countries.
Overstate (increase) the GDP of Arab countries.
C
None of the above,
Answers
Answer: Understate (reduce) the GDP of Arab countries,
Explanation:
Underground economy simply refers to the trade which involves goods and services that the government of a particular country isn't aware of or trading involving illegal activities.
We should note that the underground activities are not added to the gross domestic product of countries. This, therefore leads to a reduction in the GDP of such countries. In this case, there'll be an understatement of the GDP of the Arab countries.
The process of asset transformation refers to the conversion of:_______
a. safer assets into risky assets.
b. safer assets into safer liabilities.
c. risky assets into safer assets.
d. risky assets into risky liabilities.
Answers
Answer: c. Risky assets into safer assets
Explanation:
The process of asset transformation refers to the conversion of risky assets into safer assets. Asset transformationa is simply a form of transformation in which financial institutions like banks use deposits in the generation of revenue through the pooling deposits in order to make loans. It has to do with transforming bank liabilities into bank assets.