Business, 04.07.2020 23:01 kenyatte97

Sandhill Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $12,000,000 on January 1, 2020. Sandhill expected to complete the building by December 31, 2020. Sandhill has the following debt obligations outstanding during the construction period. Construction loanâ€”12% interest, payable semiannually, issued December 31, 2013 2,000,000Short-term loanâ€”10% interest, payable monthly, and principal payable at maturity on 5/30/15 1,400,000Long-term loanâ€”11% interest, payable on January 1 of each year, Principal payable on 1/1/18 1,000,000Required:a. Assume that Harrisburg completed the office and warehouse building on December 31, 2020, as planned at a total cost of $5,200,000, and the weighted-average amount of accumulated expendi- tures was $3,600,000. Compute the avoidable interest on this project. b. Compute the depreciation expense for the year ended December 31, 2021. Harrisburg elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 yearsand a salvage value of $300,000

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