Valuing Investments

The company had the following loans outstanding for the entire year:The company began the self-construction of a building on January 1. The following expenditures were made during the year:January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000November 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600,000Construction was completed on December 31. Compute (1) The amount of interest capitalized during the year and (2) The recorded cost of the building at the end of theyear.

The company has decided to use group depreciation based on the straight-line depreciation method. The initial pool of assets on which the group depreciation rate is based is as follows:

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Compute the group depreciationrate.

The cost of the fair value through profit or loss securities of Cepeda Company at December 31, 2011, is $62,000. AT December 31, 2011, the fair value of the securities is $59,000.

Prepare the adjusting entry to record the securities at fair value.

The cost of the trading securities of Cepeda Company at December 31, 2010, is $62,000. At December 31, 2010, the fair value of the securities is $59,000.

Prepare the adjusting entry to record the securities at fair value.

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