Capitalization of Borrowing Costs During 2014, Tibet Building Company Constructed

question 111

Essay

Capitalization of borrowing costs During 2014, Tibet Building Company constructed various assets at a total cost of $4.2 million. The weighted-average accumulated expenditures on assets qualifying for capitalization of interest during 2014 were $2.8 million.The company had the following debts outstanding at December 31, 2014: Instructions Calculate the amounts of the following for 2014 (show calculations):
a)avoidable interest,
b)total interest to be capitalized.

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Definitions:

Conformity Research

The study of how and why individuals align their attitudes, beliefs, and behaviors with those of a group, often under social pressure or influence.

Group Pressure

The influence exerted by a group to encourage a person to conform to the group's standards.

Behavior

The actions or reactions of an individual or group in response to external or internal stimuli.

Disruptive Group Member

An individual within a group who causes disturbances or hinders the group's progress towards goals, often through negative behavior or attitudes.