80.2K

Verified Solution

Link Copied!

Flounder Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $3,000,000 on January 1, 2020. Flounder expected to complete the building by December 31, 2020. Flounder has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2019		$1,200,000
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021		840,000
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024		600,000

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Assume that Flounder completed the office and warehouse building on December 31, 2020, as planned at a total cost of $3,120,000, and the weighted-average amount of accumulated expenditures was $2,160,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Avoidable Interest

Compute the depreciation expense for the year ended December 31, 2021. Flounder elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $180,000. (Round answer to 0 decimal places, e.g. 5,275.)

Depreciation Expense

Answer & Explanation Solved by verified expert

See Answer