Fulsom Cobegan Construction of a New Factory at the Beginning of of 2016.At

Essay

Fulsom Co.began construction of a new factory at the beginning of 2016.At the end of the year, construction was completed, and construction costs totaled $200,000.Fulsom borrowed $180,000 at the beginning of 2016 to finance the construction and repaid the loan at the end of 2016.The interest rate on the loan was 9%.Determine the following amounts. A. The actual interest incurred on the construction loan during 2016 .
B. The interest to be capitalized for 2016 .
C. The total cost of the factory reported on the balance sheet.
D. What impact does capitalizing interest have on net income for 2016 ? Explain.