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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.

  1. Compute the amount of interest costs capitalized each year.
    Capitalized interest, 2019 $
    Capitalized interest, 2020 $
  2. 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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