Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. valve company started construction of a combinatio

Valve Company started construction of a combination office and warehouse building on January 1, 2017...

60.1K

Verified Solution

Question

Accounting

Valve Company started construction of a combination office and warehouse building on January 1, 2017 for its own use at an estimated cost of $5,000,000. The expected completion date of this construction project is December 31, 2017. The following debt obligations are outstanding during the construction period. $2,000,000 Construction loan12% interest, payable semiannually, issued December 31, 2016 $1,400,000 Short-term loan10% interest, payable monthly, and principal payable at maturity on May 30, 2018 $1,000,000 Long-term loan11% interest, payable on January 1 of each year. Principal payable on January 1, 2021

(a) Assume that Valve completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,200,000, and the weighted-average amount of accumulated expenditures was $3,600,000. Compute the avoidable interest on this project. (Carry all computations to two decimal places.)

(b) Compute the depreciation expense for the year ended December 31, 2018. Valve 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 $300,000. (Carry all computations to two decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

ve the right triangle ABC with C 90 39 45 c 596 9 ft B...

Accounting
1.2K views

It has been said that advances in information technology have made in both easier and more...

Medical Sciences
1.2K views

why does citric acid cycle stop when oxygen is removed? Explain! 2) A patient takes an antibiotic...

Mechanical Engineering
1.2K views

5) i) A two axes of an x-y positioning table are each driven by a stepping...

Physics
1.2K views

In standard YDSE the ratio of the intensity at the center of a bright fringe...

Physics
1.2K views

A particle executes SHM between x = -A and x = + A. The time...

Statistics
1.2K views

It is thought that not as many Americans buy presents to celebrate Valentine s Day...

Algebra
1.2K views

2 15 18 21 e none of the above Question 2 1 point In ABKR...

Accounting
1.2K views

37. Under section 54EC, capital gains on transfer of land or building or...

Accounting
1.2K views

Answer to Part A

Accounting
1.2K views

The units of Manganese Plus available for sale during the year were as follows: Mar....

Accounting
1.2K views

(To record cost of goods sold.) sec20% Salaries and Wocer Expense Canh sec23 sec23 Accounts...