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Lakeshore Gelato Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1 , 2 0
Lakeshore Gelato Company is constructing a production complex that qualifies for interest capitalization. The following information is available:
Capitalization period: January Y to June Y
Expenditures on project:
Y:
January $
May
October
Y:
March
June
Amounts borrowed and outstanding:
$ million borrowed at specifically for the project
$ million borrowed on July at
$ million borrowed on January at
Required:
Round all final numeric answers to two decimal places.
Compute the amount of interest costs capitalized each year.
If it is assumed that the production complex has an estimated life of years and a residual value of $ compute the straightline depreciation in Y
What would be disclosed on the Y and Y financials
a Income Statement
b Balance Sheet
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