On January 1, 2022, Flounder Outfitters signed a fixed-price contract to have Builder Associates construct a major piant facility ata cost of R$4,320,000. It was estimated that it would take 3 years to complete the project. Also on January 1. 2022, to finance theconstruction cost, Flounder borrowed R$4,320,000 payable in 10 annual installments of R$432,000, plus interest at the rateof 10%. During 2022, Flounder made deposit and progress payments totaling R$1.620,000 under the contract. The excessborrowed funds were invested in short-term securities, from which Flounder realized investment income of R$54,000.What amount should Flounder report as capitalized borrowing cost at December 31, 2022?Capitalized borrowing costR$

Interest paid on the borrowing which are specifically borrowed for a qualifying asset will be…

Answered: On January 1, 2022, Flounder Outfitters…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 18PC

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ISBN:

9781285190907

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