Question
Bruzzone industries decided to construct a new plant and began construction on January 1, 2010 and complete construction on January 1, 2012, Assume bruzzone has
Bruzzone industries decided to construct a new plant and began construction on January 1, 2010 and complete construction on January 1, 2012, Assume bruzzone has a weighted average interest rate on their debt of 14% and that total actually interest paid on all existing debt each December 31 is $700,000. Bruzzone had the following expenditures related to the construction.
January 1, 2010 $2,600,000
July 1, 2010 $1,000,000
April 1, 2011 $800,000
What amount of interest will be capitalized for the year 2010?
a) $112,000
b) $434,000
c)$504,000
d) $588,000
e)616,000
f) $658,000
g) 700,000
Assume the amount of interest capitilized during 2010 was $500,000. What amount of interest will be capitalized for the year 2011?
a) $112,000
b) $434,000
c)$504,000
d) $588,000
e)616,000
f) $658,000
g) 700,000
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