# Intermediate Accounting Chapter 10 Exercise and Brief Exercises

Pages: 45 (4462 words) Published: April 24, 2011
CHAPTER 10
SOLUTIONS TO BRIEF EXERCISES

BRIEF EXERCISE 10-1

\$27,000 + \$1,400 + \$10,200 = \$38,600

BRIEF EXERCISE 10-2

|Expenditures | | | | | | | | | |Capitalization Period | |Weighted-Average Accumulated Expenditures | |Date | |Amount | | | | | |3/1 | |\$1,800,000 | |10/12 | |\$1,500,000 | |6/1 | | 1,200,000 | | 7/12 | | 700,000 | |12/31 | | 3,000,000 | |0 | | 0 | | | |\$6,000,000 | | | |\$2,200,000 |

BRIEF EXERCISE 10-3

| |Principal | |Interest | |10%, 5-year note |\$2,000,000 | |\$200,000 | |11%, 4-year note | 3,500,000 | | 385,000 | | |\$5,500,000 | |\$585,000 |

|Weighted-average interest rate = |\$585,000 |= 10.64% | | |\$5,500,000 | |

BRIEF EXERCISE 10-4

|Weighted-Average |X |Interest |= |Avoidable | |Accumulated Expenditures | |Rate | |Interest | |\$1,000,000 | |12% | |\$120,000 | | 1,200,000 | |10.64% | | 127,680 | |\$2,200,000 | | | |\$247,680 | BRIEF EXERCISE 10-5

|Truck (\$80,000 X .68301) |54,641 | | |Discount on Notes Payable |25,359 | | | Notes Payable | |80,000 |

BRIEF EXERCISE 10-6

| | | | | | | |Recorded Amount | | |Fair Value | |% of Total | |Cost | | | |Land |\$ 60,000 | | 60/360 |X |\$315,000 | |\$ 52,500 | |Building | 220,000 | |220/360 |X |\$315,000 | | 192,500 | |Equipment | 80,000 | | 80/360 |X |\$315,000 |...

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