E10-7b (capitalization of interest) bagwell furniture company started

E10-7B (Capitalization of Interest) Bagwell Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $2,500,000 on January 1, 2012. Bagwell expected to complete the building by December 31, 2014. Bagwell has the following debt obligations outstanding during the construction period.

Construction loan—15% interest, payable semiannually, issued

Don't use plagiarized sources. Get Your Custom Essay on
E10-7b (capitalization of interest) bagwell furniture company started
From as low as $5/Page
Order Essay

December 31, 2013                                                                                        $1,000,000

Short-term loan—10% interest, payable monthly, and principal payable

at maturity on May 30, 2014                                                                               700,000

Long-term loan—11% interest, payable on January 1 of each

year. Principal payable on January 1, 2018                                                       500,000

Instructions

(Carry all computations to two decimal places.)

(a) Assume that Bagwell completed the office and warehouse building on December 31, 2014, as planned, at a total cost of $2,600,000, and the weighted average of accumulated expenditures was $1,800,000. Compute the avoidable interest on this project.

(b) Compute the depreciation expense for the year ended December 31, 2014. Bagwell 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 $150,000.

30 years and a salvage value of $150,000.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Confirm Eligibility