. The following three situations involve the capitalization of interest. Situation I On January 1, 2017, Marigold, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4, 323,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2017, to finance the construction cost, Marigold borrowed $4, 323,000 payable In 10 annual installments of $432, 300, plus interest atthe rate of 10%. During 2017, Marigold made deposit and progress payments totaling $1, 621, 125 under the contract; the weighted-average amount of accumulated expenditures was$864, 600 for the year. The excess borrowed funds were invested in short-term securities, from which Marigold realized investment income of $252, 200. What amount should Marigold report as capitalized interest at December 31, 2017? Capitalized interest $ _________ Situation II During 2017, Swifty Corporation constructed and manufactured certain assets and incurred the following interest costs in connection with those activities. All of these assets required an extended period of time for completion. Assuming the effect of interest capitalization is material, what is the total amount of interest costs to be capitalized? The total amount of interest costs to be capitalized $ _________ Situation III Nash, Inc. has a fiscal year ending April 30. On May 1, 2017, Nash borrowed $9, 188,000 at 11% to finance construction of its own building. Repayments of the loan are to commence the month following completion of the building. During the year ended April 30, 2018, expenditures for the partially completed structure totaled $6, 431, 600. These expenditures wereincurred evenly throughout the year. Interest earned on the unexpended portion of the loan amounted to $597, 220 for the year. How much should be shown as capitalized interest on Nash's financial statements at April 30, 2018? Capitalized interest on Nash's financial statements $ ___

Exercise 10-9 (Part Level Submission)

On July 31, 2017, Sunland Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Sunland issued a $322,800, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $222,800 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Sunland made a final $100,000 payment to Minsk. Other than the note to Netherlands, Amsterdams only outstanding liability at December 31, 2017, is a $32,800, 8%, 6-year note payable, dated January 1, 2014, on which interest is payable each December 31.

(a)

Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2017.

Interest revenue(322,800-222,800)*.1/(12/3) =$2500

Weighted-average accumulated expenditures(222,800/(12/3)) =$ 55700

Avoidable interest(55,700*.12) =$ 6684On July 31, 2017, Sunland Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Sunland issued a $322,800, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $222,800 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Sunland made a final $100,000 payment to Minsk. Other than the note to Netherlands, Amsterdams only outstanding liability at December 31, 2017, is a $32,800, 8%, 6-year note payable, dated January 1, 2014, on which interest is payable each December 31.

(a)

Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2017.

Interest revenue(322,800-222,800)*.1/(12/3) =$2500

Weighted-average accumulated expenditures(222,800/(12/3)) =$ 55700

Avoidable interest(55,700*.12) =$ 6684

Interest capitalized $

Please show math