Turner Co. owned a warehouse and then decided to build a new automated racking system in the warehouse. They began construction of the system on January 1, 2012. The project was completed on December 31, 2012 and placed into service on 1/1/2013. Payments to the contractors were made as follows: January 1, 2012 $ 50,000 April 1, 2012 $590,000 October 1, 2012 $ 270,000 Total $910,000 On April 1, 2012, the company obtained a $480,000, 6% annual interest rate construction loan. The loan was outstanding for the entire construction period. The other interest bearing debt of the company included two long-term notes of $180,000 and $120,000 with interest rates of 4% and 5% respectively. The loans were outstanding for the entire year. To save you time- I am going to give you avoidable interest for these facts. (but you might want to try to compute it to see if you get it right, too!) Avoidable interest for 2012 is $32,320. The racking system has an estimated useful life of 10 years and an estimated residual value of $100,000. Turner computes depreciation for short years using the nearest full month as the convention. Turner uses the double declining balance method. 1. Assume all interest payments for 2012 are made in cash on December 31, 2012. What is the total interest paid in cash by Turner on 12/31/2012? (This is ?actual interest?). You type 1. #put your final answer here# (then show your work after under that) 2. What is the amount of interest capitalized for 2012? You type 2. #put your final answer here# (then show your work after under that) 3. How much interest expense will Turner report on its income statement for 2012? You type 3. #put your final answer here# (then show your work after under that) 4. What is acquisition cost for the racking system based on the information we have? _________________ You type 4. #put your final answer here# (then show your work after under that)

\fGHW 3 PP&E Please type your responses into the text submissions section of the Assignment in Blackboard following the directions here. Note this is different that the approach for Homework 2. If you do not show your work as requested, I cannot give follow-through credit. Turner Co. owned a warehouse and then decided to build a new automated racking system in the warehouse. They began construction of the system on January 1, 2012. The project was completed on December 31, 2012 and placed into service on 1/1/2013. Payments to the contractors were made as follows: January 1, 2012 $ 50,000 April 1, 2012 $590,000 October 1, 2012 $ 270,000 Total $910,000 On April 1, 2012, the company obtained a $480,000, 6% annual interest rate construction loan. The loan was outstanding for the entire construction period. The other interest bearing debt of the company included two long-term notes of $180,000 and $120,000 with interest rates of 4% and 5% respectively. The loans were outstanding for the entire year. To save you time- I am going to give you avoidable interest for these facts. (but you might want to try to compute it to see if you get it right, too!) Avoidable interest for 2012 is $32,320. The racking system has an estimated useful life of 10 years and an estimated residual value of $100,000. Turner computes depreciation for short years using the nearest full month as the convention. Turner uses the double declining balance method. 1. Assume all interest payments for 2012 are made in cash on December 31, 2012. What is the total interest paid in cash by Turner on 12/31/2012? (This is \"actual interest\"). You type 1. #put your final answer here# (then show your work after under that) 2. What is the amount of interest capitalized for 2012? You type 2. #put your final answer here# (then show your work after under that) 3. How much interest expense will Turner report on its income statement for 2012? You type 3. #put your final answer here# (then show your work after under that) 4. What is acquisition cost for the racking system based on the information we have? _________________ You type 4. #put your final answer here# (then show your work after under that) 5. Complete the depreciation schedule below (like I gave you in class- fill in every blank cell) that shows the depreciation expense, accumulated depreciation and net book value for the racking system every year for the first 3 years from 2013-2015. Depreciable Depreciation Accumulated Year Mo. Cost Residual Cost expense Depreciation Net book value 2013 12 5a. 5b. 5c. 2014 12 5d 5e 5f 2015 12 5g 5h 5i Type your answers in this format, please. (##### is your final answer) 5a ##### (and show your work for the expense computation) 5b###### 5c###### 5d######(and show your work for the expense computation) 5e###### 5f###### 5g######(and show your work for the expense computation) 5h###### 5i###### 6. Assume that after the depreciation adjustment is made in 2015, that the company determines the racking system is technologically obsolete and that the future cash flows from the system are limited to the amount it could be sold for. They estimate that possible selling value to be $200,000 at 12/31/2015. What additional adjusting entry would Turner need to record? Give me the entry and show any calculations below the entry. You can type the entry as DR. Account name .....$###### CR. Account name...................$###### No need to be fancy- just indicate debit or credit in front of each line for me