Determine the original cost of the Land:

Using the information presented in #1 above, determine the Historical Cost of the building after taking into consideration the capitalization of interest:

Using the information presented in #1 above, determine Interst Expense that Sparky would report on their Income Statement for the year ended December 31, 2014.

Using the information in #1 above, assume instead that Sparky's only other outstanding debt during 2014 was a $150,000, 9%, three year note (i.e. all other information remains unchanged but Sparky no longer has $3,000,000 of other non-specific borrowings; only $150,000 of non-specific debt). Determine the Avoidable Interest from this construction project under this scenario.

Using the information presented in #1 above, determine the historical cost that should be established on Sparky's Balance Sheet for the Equipment:

Using the information presented in #1 above, determine the Historical Cost that should be allocated to the Furniture: (Round to the nearest dollar).

Early in 2014, Sparky, Inc. finalized plans to expand operations. The first stage was completed on January 29th with the purchase of a tract of land to be used as the location for their new office complex. The land and existing building were purchased for $800,000, paying cash. Title search, title insurance, back property taxes and other closing costs totaling $20,000 were paid at closing. During February, the old building was demolished at a cost of $70,000, and an additional $50,000 was paid to clear and grade the land. Salvaged materials from the demolished building were sold for proceeds of S10,000. Construction of the new office complex began on March 1 and was completed on November 30, 2014. Construction expenditures paid to sub-contractors were made as follows: $ 900,000 $1,200,000 $1,500,000 $1,800,000 une 1 Sept 1 Nov 1 Sparky borrowed a $2,100,000, 8%, 2-year note on February 1st to help finance construction. Interest will be paid annually. The company's only other outstanding debt during all of 2014 was a $3,000,000, 996, 10-year note payable. In December, the company purchased equipment and furniture for a lump-sum price of $600,000. The fair values of the equipment and furniture were $455,000 and $245,000, respectively