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ACCT105 Quizzes and Solutions

The document contains information about capitalizable borrowing costs for the construction of a building. It details the timeline and amounts of construction expenditures and borrowings. It then calculates the capitalizable general borrowing costs as $880,000 and capitalizable specific borrowing costs as $2,320,000, for a total capitalizable borrowing cost of $3,200,000 that will be added to the $80 million construction cost for a total capitalized cost of the building of $83,200,000.

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105 views8 pages

ACCT105 Quizzes and Solutions

The document contains information about capitalizable borrowing costs for the construction of a building. It details the timeline and amounts of construction expenditures and borrowings. It then calculates the capitalizable general borrowing costs as $880,000 and capitalizable specific borrowing costs as $2,320,000, for a total capitalizable borrowing cost of $3,200,000 that will be added to the $80 million construction cost for a total capitalized cost of the building of $83,200,000.

Uploaded by

Away To Ponder
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ACCT105 Quiz 11 - Prelim

*07/01/20 to 07/01/21 *4/10


*07/01/21 to 07/01/22 *3/10
*07/01/22 to 07/01/23 *2/10

*2022 Depreciation Expense = (DA x 3/10 x 1/2) + (DA x 2/10 x 1/2)


*2022 Depreciation Expense = (DA x 15%) + (DA x 10%)
*2022 Depreciation Expense = (DA x 25%)
*DA = 155,000/25% = 620,000

1 Total Cost = 620,000 + 30,000 = 650,000


2 620,000 x 4/10 x 1/2 = 124,000
3 620,000 x 4/10 x 1/2 = 124,000
620,000 x 3/10 x 1/2 = 93,000 217,000
4 Cost 650,000
A/D (124 + 217 + 155) (496,000)
12/31/2022 Net Book Value 154,000
ACCT105 Quiz 10 - Prelim

*DD Rate = 1/5 x 2 = 40%


*2019 Depreciation = 40% x 3/12 = 10% of CA
*2020 Depreciation = 40% of CA
*2021 Depreciation = 40% of CA
*12/31/21 CA = 100% x 90% x 60% x 60% = 32.4%
*12/31/21 A/D = 100% - 32.4% = 67.6%

1 Total Cost = 662,480/67.6% = 980,000


2 Residual Value = 980,000 x 3% = 29,400
3 2019 Depreciation = 980,000 x 10% = 98,000
4 2020 Depreciation = 980,000 x 90% x 40% = 352,800
5 2021 Depreciation = 980,000 x 90% x 60% x 40% = 211,680
ACCT105 Quiz 09 - Prelim

DA = 550,000 - 22,960 527,040 3 527,040 x 8/36 x 7/12 68,320


1 527,040/8 x (5/12) 27,450 527,040 x 7/36 x 5/12 42,700
2 Cost 550,000 2021 Depreciation 111,020
A/D:
527,040 x 17/96 93,330 4 Cost 550,000
CA, 12/31/21 456,670 A/D, 12/31/2021:
527,040 x 8/36 117,120
527,040 x 7/36 x 5/12 42,700 159,820
CA, 12/31/2021 390,180
ACCT105 Quiz 08 - Prelim
1 9,087,000 x (25/325) 699,000
SYD = (25*26)/2 = 325 2 9,087,000 x (24/325) 671,040
2023 A/D = DA x [(25+24+23+22)/325] 3 9,087,000 x (23/325) 643,080
2023 A/D = DA x (94/325) 4 9,087,000 x (22/325) 615,120
DA = 2,628,240 x (325/94) 9,087,000 5 10,287,000 - 2,628,240 7,658,760
Cost = 9,087,000 + 1,200,000 10,287,000 or
(9,087,000 x 231/325) + 1,200,000
ACCT105 Quiz 07 - Prelim

1 73,260/5 14,652 3 73,260 x 5/15 x 4/12 8,140


2 Cost 77,200 73,260 x 4/15 x 8/12 13,024
A/D (73,260 x 20/60) 24,420 2021 Depreciation 21,164
CA, 12/31/2022 52,780
4 Cost 77,200
AD can be computed also as: A/D, 12/31/2021:
73,260/5 x 8/12, plus (2020 dep) 73,260 x 5/15 24,420
73,260/5 (2021 dep) 73,260 x 4/15 x 8/12 13,024 37,444
CA, 12/31/2021 39,756
ACCT105 Quiz 06 - Prelim

1 16,200,000/15 1,080,000 3 16.2m x (14/120) 1,890,000


2 Cost 16,500,000 4 Cost 16,500,000
A/D (1,080,000 x 3) (3,240,000) A/D (16.2m x 42/120) 5,670,000
CA, 12/31/2022 13,260,000 CA, 12/31/2022 10,830,000
*01/01 8,000,000 *12/12 8,000,000 Total Capitalizable Borrowing Cost
*03/31 24,000,000 *09/12 18,000,000 Total Construction Cost
*09/30 40,000,000 *03/12 10,000,000 Total Capitalized Cost of Building
*12/31 8,000,000 -
Ave. Acc. Exp. 36,000,000 Total Interest - General Borrowings
Specific Borrowings 28,000,000 Capitalizable General Borrowing Cost
Ave. Acc. Exp. Attributable to GB 8,000,000 Interest Expense
Multiply to Capitalization Rate
Pr Int
40,000,000 5,000,000
60,000,000 6,000,000
100,000,000 11,000,000
*11/100 11.00%
Capitalizable General Borrowing Cost 880,000
Capitalizable Specific Borrowing Cost
*28m x 10% - 480,000 2,320,000
Total Capitalizable Borrowing Cost 3,200,000
talizable Borrowing Cost 3,200,000
truction Cost 80,000,000
talized Cost of Building 83,200,000

est - General Borrowings 11,000,000


ble General Borrowing Cost 880,000
10,120,000

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