Buildings
BEGINNING
DEPRECIATION
DISPOSAL
ENDING
Buildings:
Depreciation Expense (600,000/10*3/12)
Accumulated Depreciation
(23,422,469*6%)
Machinery & Equipment:
Depreciation Expense (600,000/10*3/12)
Accumulated Depreciation
(update from Jan.1 - April 1)
Cash
Accumulated Depreciation (600,000/10*5)
Loss on Fire
Machinery and Equipment
6,577,531
1,405,348
7,982,879
Accumulated Depreciation
Machinery &
Equipment
6,500,000
2,595,000
(300,000)
8,795,000
1,405,348
1,405,348
15,000
15,000
200,000
300,000
100,000
600,000
Machinery and Equipment
Cash
7,800,000
Depreciation Expense
Accumulated Depreciation
[OLD = 22,500,000 - 600,000] /10]
[NEW = 7,800,000/10 * 6/12]
2,580,000
7,800,000
2,580,000
2,190,000
390,000
mulated Depreciation
Delivery
Leasehold
Equipment
Improvement
2,400,000
510,000
450,000
(270,000)
2,640,000
450,000
Delivery Equipment:
Delivery Equipment (new)
Accumulated Depreciation (450,000-180,000)
Loss on Sale
Cash
Delivery Equipment (old)
Depreciation Expense
Accumulated Depreciation
(OLD = 400,000 - 90,000)
(NEW = 600,000 * 5/15)
600,000
270,000
80,000
510,000
310,000
200,000
Leasehold Improvements:
Depreciation Expense
450,000
Accumulated Depreciation
(4,500,000/80*8)
Useful life = 120 months (10 years * 12)
Lease Term = 80 months (May 1, 2014 - December 31, 2020)
(Whichever is shorter)
500,000
450,000
510,000
450,000
31, 2020)
Additional Scenario:
How much is the cost of the building on Decebmer 31, 2014?
(assuming it was completed in December 31, 2014)
2013
Specific
Average
Expenditures
600,000
%
10%
Interest
60,000
1,600,000
General
1,000,000
Capitalized Borrowing Cost
Average Expenditures
1/1/2013
800,000
12/12
4/1/2013 1,000,000
9/12
1/1/2013
600,000
1/12
2014
Specific
12%
120,000
180,000
800,000
750,000
50,000
1,600,000
Average
Expenditures
600,000
%
10%
Interest
60,000
3,580,000
General
2,980,000
Capitalized Borrowing Cost
1/1/2014
3/1/2014
Average Expenditures
2,580,000
12/12
1,200,000
10/12
12%
357,600
417,600
2,580,000
1,000,000
3,580,000
2013 - Construction Cost
2013 - Capitalized Borrowing Cost
2014 - Construction Cost
2014 - Capitalized Borrowing Cost
Building (12/31/14)
2,400,000
180,000
1,200,000
417,600
4,197,600
Item 1
How much is the cost of the building on June 30, 2014?
(assuming it was completed in June 30, 2014)
2013
Specific
Average
Expenditures
600,000
%
10%
Interest
60,000
12%
120,000
180,000
1,600,000
General
1,000,000
*Capitalized Borrowing Cost
Average Expenditures
1/1/2013
800,000
12/12
4/1/2013 1,000,000
9/12
1/1/2013
600,000
1/12
2014
Specific
800,000
750,000
50,000
1,600,000
Average
Expenditures
600,000
%
5%
Interest
30,000
3,380,000
General
2,780,000
Capitalized Borrowing Cost
1/1/2014
3/1/2014
Average Expenditures
2,580,000
6/6
1,200,000
4/6
6%
166,800
196,800
2,580,000
800,000
3,380,000
2013 - Construction Cost
2013 - Capitalized Borrowing Cost
2014 - Construction Cost
2014 - Capitalized Borrowing Cost
Building (6/30/14)
2,400,000
180,000
1,200,000
196,800
3,976,800
Item 2
How much is the cost of the building on Decebmer 31, 2014?
(assuming that the specific construction loan was also used for general purposes)
2013
General
General
600,000
5,000,000
5,600,000
Average Rate
10%
12%
60,000
600,000
660,000
11.79%
1/1/2013
4/1/2013
1/1/2013
Average Expenditures
800,000
12/12
1,000,000
9/12
600,000
1/12
1/1/2014
3/1/2014
Average Expenditures
2,588,640
12/12
1,200,000
10/12
800,000
750,000
50,000
1,600,000
2,588,640
1,000,000
3,588,640
2013 - Construction Cost
2013 - Capitalized Borrowing Cost
2014 - Construction Cost
2014 - Capitalized Borrowing Cost
Building (12/31/14)
31, 2014?
so used for general purposes)
*Capitalized Borrowing Cost
188,640
*Capitalized Borrowing Cost
423,101
2,400,000
188,640
1,200,000
423,101
4,211,741
