Wording is confusing but i asked my teacher and it needs tge balance sheet values for land and Office and calculate the interest to be capitalized.
Page 13 of 16 Intermediate Accounting Spring, 2020 Exam type question Construction Interest Problem Maple Island Company Construction Interest Problem Maple Island Company purchased land in 2017 for a new office complex at a cost of $525.000. On May 1, 2018, construction of the office complex began (the land was appraised at $575.000 on that date). Construction was completed on October 1, 2019 Date of loan Construction financing was obtained at an annual interest rate of 8%. All construction borrowing was repaid on Nov. 1. 2019. Shoreline's financial year is the calendar year. During all of 2018 and 20198, Shoreline had the other following loans: Annual Amount Date of repayment $250.000 (May 1, 2018 July 1, 2020 Bank B 5% $500,000 July 1, 2017 April 1, 2020 Loan Rale 796 Bank A Expenditures for the building, and draws against the construction loan agreement were as follows: Construction payments June 1, 2018 September 1, 2018 Construction loan amounts 570.000 June 1. 2018 720,000 August 1, 2018 540,000 540.000 February 1, 2019 April 1, 2019 October 1, 2019 880.000 February 1, 2019 1,080,000 May 1, 2019 400,000 900.000 180,000 700 Required: Genereal Borrowny 2018 200,00 a 71008th Balance sheet asset titles and account balances (not including accumulated depreciation relative the above transactions on: 2014 250,000 onio al December 31, 2018 500.00 ogrool December 31, 2019 Page 13 of 16 Intermediate Accounting Spring, 2020 Exam type question Construction Interest Problem Maple Island Company Construction Interest Problem Maple Island Company purchased land in 2017 for a new office complex at a cost of $525.000. On May 1, 2018, construction of the office complex began (the land was appraised at $575.000 on that date). Construction was completed on October 1, 2019 Date of loan Construction financing was obtained at an annual interest rate of 8%. All construction borrowing was repaid on Nov. 1. 2019. Shoreline's financial year is the calendar year. During all of 2018 and 20198, Shoreline had the other following loans: Annual Amount Date of repayment $250.000 (May 1, 2018 July 1, 2020 Bank B 5% $500,000 July 1, 2017 April 1, 2020 Loan Rale 796 Bank A Expenditures for the building, and draws against the construction loan agreement were as follows: Construction payments June 1, 2018 September 1, 2018 Construction loan amounts 570.000 June 1. 2018 720,000 August 1, 2018 540,000 540.000 February 1, 2019 April 1, 2019 October 1, 2019 880.000 February 1, 2019 1,080,000 May 1, 2019 400,000 900.000 180,000 700 Required: Genereal Borrowny 2018 200,00 a 71008th Balance sheet asset titles and account balances (not including accumulated depreciation relative the above transactions on: 2014 250,000 onio al December 31, 2018 500.00 ogrool December 31, 2019
