Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Oxford is a book distributor that had been operating in its original facility

Oxford is a book distributor that had been operating in its original facility

Accounting

Oxford is a book distributor that had been operating in its original facility. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for Oxford since 2014. Oxford' original facility became obsolete by early 2019 because of the increased sales volume and the fact that Oxford now carries CDs in addition to books. On January 1, 2014, Oxford contracted with Black Construction to have a new building constructed for S4,000,000 on land owned by Oxford. The payments made by Oxford to Black Construction are shown in the schedule below. On 30 July 2014 $450,000 On 31 Jan 2015 750,000 30 Jun 2016 8 00,000 Construction was completed, and the building was ready for occupancy on 27 January 2015. Oxford had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2020, the end of its fiscal year. o 10%, 5-year note payable of $2,500,000, dated April 1, 2016, with interest payable annually on April 1. o 12%, 10-year bond issue of $2,500,000 sold at par on January 30, 2012, with interest payable annually on January 30. The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material Required: a) Compute the weighted-average accumulated expenditures on Oxford' new building during the capitalization period. b) Compute the avoidable interest on Oxford' new building. c) Some interest cost of Oxford Inc. is capitalized for the year ended May 31, 2020 d) Identify the items relating to interest costs that must be disclosed in Oxford' financial statements.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE