Office Furniture & Fixtures, which is estimated to cost $350,000, will be purchased in February. The manager has made arrangement with the suppliers to make a cash deposit of 40% upon signing of the agreement in February. The balance will be settled in five (5) equal monthly instalments beginning March of 2022.
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Office Furniture & Fixtures, which is estimated to cost $350,000, will be purchased in
February. The manager has made arrangement with the suppliers to make a cash deposit of
40% upon signing of the agreement in February. The balance will be settled in five (5) equal
monthly instalments beginning March of 2022.
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- Seasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Seasons estimates total costs of $17,750,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18,000,000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2022 for Seasons as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit? Difference between the accounts Debit/Credit a. $4,225,000 Credit b. $1,550,000 Debit c. $1,100,000 Debit d. $1,550,000 CreditSeasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Seasons estimates total costs of $17,750,000. Seasons estimates that the building will take 3 years to complete and commences construction on January 2, 2024. At December 31, 2024, Seasons estimates that it is 30% complete with the construction, based on costs incurred. By December 31, 2025, Seasons estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18,000,000 due to unanticipated price increases. What is the total amount of Construction Expenses that Seasons will recognize for the year ended December 31, 2025? $13,500,000 O $7,875,000 $7,987,500 O $8,175,000The accounting cycle for Project Paris Limited is from July 1 to June 30. On January 1 2021 Project Paris Limited rented out its old warehouse to Lost and Lost Limited by signing a 12-month agreement worth $2,000,000. The rentee paid the rentor for 12-months agreement in cash. At the start of October 2020, the company signed an agreement to purchase a new factory for $30,000,000. The company paid 80% in cash and the remainder by taking out a 10-year loan. Annual interest expense on the loan is $500,000. Interest will be paid in cash on July 31 each year of the loan period. Annual depreciation on the new factory is $600,000. At the end of the accounting cycle the CFO of Project Paris Limited estimated that the new factory would have increased electricity and water usage from last year by 30%. Utility expenses (that comprised electricity and water) totaled $1,500,000 for the last full year. Required: At the end of the accounting cycle (June 30, 2021) Project Paris Limited would have made…
- Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2020. Harrisburg expected to complete the building by December 31, 2020. Harrisburg has the following debt obligations outstanding during the construction period. Construction loan—12% interest, payable semiannually, issued December 31, 2019 $2,000,000 Short-term loan—10% interest, payable monthly, and principal payable at maturity on May 30, 2021 1,400,000 Long-term loan—11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 1,000,000 Instructions (Carry all computations to two decimal places.) a. Assume that Harrisburg completed the office and warehouse building on December 31, 2020, 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. b. Compute the…Stellar Furniture Company started construction of a combination office and warehouse building for it's own use at an estimated cost of $15,000,000 on January 1, 2020. Stellar expected to complete the building by December 31, 2020. Stellar has the following debt obligations outstanding during the construction period. Construction loan- 12% interest, payable semiannually, issued December 31, 2019: $6,000,000 Short-term loan- 10% interest, payable monthly, and principal payable at maturity on May 30, 2021: $4,500,000 Long-term loan- 11% interest, payable on January 1 of each year. Principal payable on January 1, 2024: $3,000,000 Question: Compute the depreciation expense for the year ended December 31, 2021. Stellar 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 $900,000. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation Expense: $Vaughn Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $10,000,000 on January 1, 2020. Vaughn expected to complete the building by December 31, 2020. Vaughn has the following debt obligations outstanding during the construction period. Construction loan-10% interest, payable semiannually, issued December 31, 2019 $4,000,000 Short-term loan-8% interest, payable monthly, and principal payable at maturity on May 30, 2021 2,800,000 Long-term loan-9% interest, payable on January 1 of each year. Principal payable on January 1, 2024 2,000,000 Assume that Vaughn completed the office and warehouse building on December 31, 2020, as planned at a total cost of $10,400,000, and the weighted-average amount of accumulated expenditures was $7,200,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round…
- Vaughn Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $10,000,000 on January 1, 2025. Vaughn expected to complete the building by December 31, 2025. Vaughn has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2024 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2026 Long-term loan-11% interest, payable on January 1 of each year; principal payable on January 1, 2029 (a) Assume that Vaughn completed the office and warehouse building on December 31, 2025, as planned, at a total cost of $10,400,000, and the weighted-average amount of accumulated expenditures was $7,200,000. 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 O decimal places, e.g. 5,275.)…YellowStone Construction is constructing an office building under contract for LimeStone Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1300000 each quarter. The total contract price is $15600000 and YellowStone estimates total costs of $17500000. YellowStone estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, YellowStone Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17750000 due to unanticipated price increases.YellowStone Construction completes the remaining 25% of the building construction on December 31, 2023, as scheduled. At that time the total costs of construction are $18500000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that YellowStone will recognize for the year ended December 31, 2023? Revenue Expenses…Khodra Construction was contracted to construct an apartment complex for NDC. The contract calls for progress billings and payments of $620,000 each quarter. The total contract price is $7,440,000 and Khodra estimates total costs of $7,100,000. Further, Khodra estimates that the complex will take 3 years to complete. Construction began on March 1, 2021. At December 31, 2021, Khodra estimated that construction was 30% complete based on costs incurred. What total amount of Revenue from Long-Term Contracts was recognized for 2021 and what was the balance in the Accounts Receivable account assuming NDC had paid $1,800,000 thus far for 2021? Revenue $Answer Accounts Receivable $Answer
- Khodra Construction was contracted to construct an apartment complex for NDC. The contract calls for progress billings and payments of $620,000 each quarter. The total contract price is $7,440,000 and Khodra estimates total costs of $7,100,000. Further, Khodra estimates that the complex will take 3 years to complete. Construction began on March 1, 2021. At December 31, 2021, Khodra estimated that construction was 30% complete based on costs incurred. What total amount of Revenue from Long-Term Contracts was recognized for 2021 and what was the balance in the Accounts Receivable account assuming NDC had paid $1,800,000 thus far for 2021?Oriole Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1650000 each quarter. The total contract price is $18762000 and Oriole estimates total costs of $17900000. Oriole estimates that the building will take 3 years to complete, and commences construction on January 2, 2021.At December 31, 2022, Oriole Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18100000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2022 for Oriole as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit? Difference between the accounts Debit/Credit $871500 Credit $4690500 Credit $871500 Debit $375000 DebitHeadland Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $7,500,000 on January 1, 2020. Headland expected to complete the building by December 31, 2020. Headland has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 $3,000,000 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 2,100,000 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 1,500,000 Assume that Headland completed the office and warehouse building on December 31, 2020, as planned at a total cost of $7,800,000, and the weighted-average amount of accumulated expenditures was $5,400,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes…