Contractors provided 42,000 such warranty contracts at an average price of $162 each. Related to these contracts, the company spent $80o,000 servicing the contracts during the current year and expects to spend $4,200,000 more in the future. What is the net profit that the company will recognize in the current year related to these contracts? a. $1,804. b. $6,004,000. c. $800,000. d. $901,000 13. Greenwich Company bought equipment for $40,000, and paid sales tax of $2,400. They also incurred the following costs: freight $600, installation costs $675, and $350 for repairs for damage during installation. How much should we debit to equipment? a. $400,000 b. $42,400 c. $43,675 d. $44,025 14. Jessie & Company bought plant assets for $5,600,000. The fair value of the assets were: Land $1,900,000, Building $2,800,000, Equipment $2.100,000, and Machinery $3,400,000. How much should have been recorded for Machinery? $1,866,667 b. $2,800,000 c. $3,360,000 d. $3,400,000 a. Use the following information to answer question 15, 16 and 17. Viktoria Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,800,000 on March 1, $1,200,000 on June 1, and $3,000,000 on December 31. Viktoria borrowed $1.000,000 on March 1 for 5 years at 12% to help finance the construction. In addition, the company had outstanding notes of $2,000,000 for 5 years at 10 % and $3,500,000 for 4 years at 11 %. 15. How much is the weighted-average expenditures for interest capitalization purposes? $1,800,000 b. $6,000,000 $2,200,000 d. $3,000,000 a. C. 16. What is weighted-average interest rate interest rate to be used for interest capitalization purposes 12.05% a. 10.22% b. 11.61% C. d. 10.64% 17. How much is the avoidable interest for Viktoria Company? a. $100,000 b. $585,000 c. $227,680 d. $5,500,000