Michael’S Is Relocation Its Accounting Dept

1) Michael’s is relocation its Accounting dept to an unused space closer to another place. The 4,000 square foot space is empty and has not been used in several years. Joe, the CIO of Personnel, is overseeing the conversion and relocation of the Accounting Dept. Michael’s maintenance people will perform the move. Joe has asked Gina, the maintenance lady, to prepare a list of what needs to be done to make the space ready for occupancy. Gina provided the following list of tasks. Assume that the labor will be performed by contractors and that the cost below include the labor charges. 2) Painting ,estimated cost $ 15,0003) Replacing the wood floors with tile to increase the life of the space $34,0004) Installing wire for computers $18,0005) Installing new modular units $ 124,0006) Removal of old modular units $ 12,0007) Sale of old modular units $ 5,000RequiredPrepared the potential entry for the item above. Make only one combined entry. __________________________________________________________________________-2)During 2014, Michaels finished the construction of a new warehouse in Virginia. Construction began on January 1, 2013. The cost of the new warehouse was $ 3,000,000 with the cost incurred evenly throughout the construction project. The following information is providedMichael’s incremental interest rate is 10%Actual interest incurred during 2014 was $135,000The average accumulated expenditures was $1,500,000Required: Prepared the entry to record the capitalized interest for 2014 ______________________________________________________________________3) Michaels completed a contract to build a storage facility for Joe Company. The construction began on January 1, 2012. The VP of Michaels has consulted with the controller regarding estimated cost and the resulting profit. During her discussion with the controller she was informed that Michael’s used the completed contract method to account for the construction project. The VP asked the controller about the percentage of completion method she remembered from her college accounting courses. She is concerned about recognizing all of the profit in a single year. She asked that the controller prepare a schedule showing the effect on the income statement and balance sheet under the percentage-of-completion vs the completed contract method. Unfortunately, the controller has delegated this task to you. The following information is availableCost for 2012= $3. 2 million, cost for 2013= $5,760,000, cost for 2014= $3,840, 000Estimated cost to complete as of the end of 2012 =$10,800,000, estimated cost to complete as of the end of 2013 =$4,000,000. 00. Billings to Joe’s Company in 2012 was $3,000,000, in 2013= $5,000,000. 00 and the remaining billings will incurred in 2014The contract price was $18,000,000Requirement: Prepare a schedule showing how much profit is recognized for years 2012, 2013, and 2014 under the percentage of completion and completed contract method. 4) Michaels company began construction on a small warehouse with a total estimated cost of $ 4,000,000. Construction began January 2, 2014. Expenditures for 2014 were made as follows: January 2, $1,000,000, March 1, $900,000, July 1, $400,000 andOctober 1, $800,000. Michael’s company financed the project by obtaining a $1,200,000, 8% construction loan in 2013 and issuing $1,000,000 in stock at the beginning of 2014. Additionally, the company had the following debt: $1,000,000, 9% long-term note, borrowed in 2012 and a $2,000,000, 11% long-term note borrowed in 2011. Both notes come due in 2018. The warehouse was completed in 2015. Requirements: A) Calculate the weighted average accumulated expenditures for 2014B) How much is avoidable interest for 2014?C) How much is actual interest for 2014?D) Make the entry capitalizing interest in 2014