Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi need help! TIA. Please show work. Google company started construction on special-purpose equipment in 2022. The equipment wasn't completed by December 31, 2022, but

Hi need help! TIA. Please show work.

Google company started construction on special-purpose equipment in 2022. The equipment wasn't completed by December 31, 2022, but is expected to be completed in 2023 at an estimated total cost of $1,300,000. These costs were incurred during 2022:

Expenditures

March 01, 2022

$ 200,000

May 01, 2022

175,000

September 01, 2022

250,000

November 01, 2022

200,000

$ 825,000

To finance this project, Google issued a $300,000, 9% note payable. The note payable was issued on June 1, 2022. Google pays interest-only until the note matures in 2027.

In addition, the only other debt outstanding in 2022 was a note payable of $800,000 issued in 2020 and which carries a 10% annual rate. Google pays interest annually with the note principal maturing in 2025.

Questions:

A. Determine the weighted-average accumulated expenditures for 2022 ______________.

B. Determine interest to be charged to expense for 2022 ________________

C. Determine the avoidable interest for 2022 __________________

D. Determine the value of Construction in Process (Special Equipment) on the December 31, 2022 balance sheet. __________________

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Peter Howells, Keith Bain

5th Edition

0273709194, 9780273709190

More Books

Students also viewed these Accounting questions

Question

Explain the causes of indiscipline.

Answered: 1 week ago

Question

=+ Who are the buyers/users of the products abroad?

Answered: 1 week ago