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6 Cards in this Set
- Front
- Back
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construction period interest
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step1) weight average expenditure. step2) total interest incurred for borrowing. 3) avoidable interest. 4) interest capitalized. 5) interest expense
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weight average interest ammount of several borrowing
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1) bonds 100k at 10% ( interest amount 10k) 2) N/P 300k at 7% ( interest amount 21k) 3) 10k ÷ (100k + 300k ) = 0.025 = 2.5% 21k ÷ 400k = 5.25% total 7.75% 4) 7.75% × 60K. borrowing amount
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q
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q
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weight average interest calculation 2 methods
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ex) 6 M face value. 8% 8M 9% 0.08 × ( 6 M / 6 M + 8M ) (3.43) + 0.09 × ( 8M / 14M)(5.14) =8.57
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depreciable base
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new owner purchase price: 135k. salvage value 15k. previous owners carrying amount estimate useful life r not relevant or distracted. 4. (cost minus salvage value)
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total expense
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expensed expense related asset and intangible asset. plus (+) amortization expense of capitaluzed assets items
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