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Interest During Construction Ventry Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2016,

Interest During Construction

Ventry Company is constructing a production complex that qualifies for interest capitalization. The following information is available:

Capitalization period:

January 1, 2016, to June 30, 2017

Expenditures on project:

2016:

January 1 - $ 564,000

May 1 -537,000

October 1 -528,000

2017:

March 1 - $ 1,536,000

June 30 564,000

Amounts borrowed and outstanding:

$1.7 million borrowed at 10%, specifically for the project

$4 million borrowed on July 1, 2015, at 12%

$16 million borrowed on January 1, 2011, at 6%

Required:

Note: Round all final numeric answers to the nearest dollar.

1. Compute the amount of interest costs capitalized each year.

Capitalized interest, 2016 -$

Capitalized interest, 2017 - $

2. If it is assumed that the production complex has an estimated life of 20 years and a residual value of $0, compute the straight-line depreciation in 2017.

$

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