Business
Business, 21.06.2020 05:57, ilovecatsomuchlolol

nterest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 $ 540,000 May 1 465,000 October 1 600,000 2020: March 1 1,500,000 June 30 600,000 Amounts borrowed and outstanding: $1.5 million borrowed at 12%, specifically for the project $6 million borrowed on July 1, 2018, at 14% $14 million borrowed on January 1, 2017, at 8% Required: Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ Capitalized interest, 2020 $ If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2020. Round answer to two decimal places. $ Next Level Since GAAP requires accrual accounting, if a company capitalizes interest during the construction period it will report income than if it had not capitalized interest. In future periods, the same company will report income than if it had not capitalized interest.

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