Question
On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished and ready for use on September 30,
On January 1, 2024, a company began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2025. Expenditures on the project were as follows:
| January 1, 2024 | $ 200,000 |
|---|---|
| September 1, 2024 | $ 300,000 |
| December 31, 2024 | $ 300,000 |
| March 31, 2025 | $ 300,000 |
| September 30, 2025 | $ 200,000 |
The company borrowed $750,000 on a construction loan at 12% interest on January 1, 2024. This loan was outstanding throughout the construction period. The company had $4,500,000 in 9% bonds payable outstanding in 2024 and 2025.
Interest (using the specific interest method) capitalized for 2025 was:
$86,805.
$87,875.
$67,500.
$104,625.
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The Productivity Audit
Authors: Mark Spelman, Paul Spence
1st Edition
1907766073, 978-1907766077
