The following three situations involve the capitalization of interest Situation I On January 1, 2017, Sheffield, 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, Sheffield borrowed $4,323,000 payable in 10 annual installments of $432,300, plus interest at the rate of 10 During 2017, Sheffield 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 Sheffield realized investment income of $252,200 What amount should Sheffield report as capitalized interest at December 31, 2017 Capitalized interest $ Situation II During 2017, Tamarisk Corporation constructed and manufactured certain assets and incurred the following interest costs in connection with those activities interest cost accured Warehouse constructed for Tamarisks own use $33,960 Special order machine for sale to unrelated customer, produced according to customers specifications 9,250 Inventories routinely manufactured, produced on a repetitive basis 8,020 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 Vaughn, Inc has a fiscal year ending April 30 On May 1, 2017, Vaughn 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 were incurred 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 Vaughns financial statements at April 30, 2018 Capitalized interest on Vaughns financial statements $

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The following three situations involve the capitalization of interest. Situation I On January 1, 2017, Sheffield, Inc. signed a fixed-price contract to have Builder Associates

The following three situations involve the capitalization of interest. Situation I On January 1, 2017, Sheffield, 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, Sheffield borrowed $4,323,000 payable in 10 annual installments of $432,300, plus interest at the rate of 10%. During 2017, Sheffield 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 Sheffield realized investment income of $252,200. What amount should Sheffield report as capitalized interest at December 31, 2017?

Capitalized interest $_______ Situation II During 2017, Tamarisk Corporation constructed and manufactured certain assets and incurred the following interest costs in connection with those activities. interest cost accured

Warehouse constructed for Tamarisks own use		$33,960
Special-order machine for sale to unrelated customer, produced according to customers specifications		9,250
Inventories routinely manufactured, produced on a repetitive basis		8,020

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 Vaughn, Inc. has a fiscal year ending April 30. On May 1, 2017, Vaughn 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 were incurred 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 Vaughns financial statements at April 30, 2018?

Capitalized interest on Vaughns financial statements

$________-