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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,
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 $ 444,000 May 1 513,000 October 1 528,000 2020: March 1 1,416,000 June 30 660,000 - Amounts borrowed and outstanding: $1.6 million borrowed at 10%, specifically for the project $6 million borrowed on July 1, 2018, at 12% $18 million borrowed on January 1, 2017, at 6%
Required:
Note: Round all final numeric answers to two decimal places.
- 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 25 years and a residual value of $0, compute the straight-line depreciation in 2020.
$ __________________
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