1.On January 1, 2012, Will Company began construction of a new building for its own use. It was completed and put to productive use on December 31, 2012. Will has a December 31 year-end. On January 1, 2012 Will borrowed $500,000 at 12% to help finance the construction, signing a one-year construction loan. In addition, Will had the following long-term debt outstanding throughout 2012. 5% bonds (maturing in 2022) $400,000 8% bonds (maturing in 2021) $800,000 Compute capitalized interest for 2012:

Select one:

a. $78,000

b. $67,500

c. $70,500

d. $72,000

e. $69,000

2.

Given the following for the Illinois Company: Depreciation expense for year-end 12/31/14 is:

Select one:

a. $2,082

b. $2,250

c. $2,109

d. $2,333

e. $2,375

Construction Costs Incurred Date Amount Jan 1, 2012 $200,000 May 1, 2012 $360,000 Aug. 1, 2012 $480,000 Dec. 1, 2012 $120,000 Date 5/1/13 Event Purchase Machine Salvage: $2,000 Cost: $12,000 5 year life straight-line 10/1/14 Addition to Machine Extends useful life to 5/1/19 Cost: $4000 No change in salvage