Carlson Company Began Constructing a Building for Its Own Use

question 89

Essay

Carlson Company began constructing a building for its own use in January 2012.During 2012,Carlson incurred interest of $75,000 on specific construction debt and $16,750 on other borrowings.Interest computed on the weighted-average amount of accumulated expenditures for the building during 2012 as $55,000
Required:
What amount of interest should Carlson capitalize?

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Definitions:

Intestate

Referring to dying without a legal will, resulting in the distribution of the estate according to state laws.

Per Stirpes

a legal term indicating a method of distributing an estate where descendants inherit a deceased beneficiary's share in an estate.

Per Capita

A method of distributing an estate where each recipient receives an equal share of the property.

Constructive Trust

An equitable remedy imposed by a court to rectify unjust enrichment or wrongful conduct, transferring property to someone rightfully entitled to it.