Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a company constructs a building for its own use. c

A company constructs a building for its own use. Construction began on January 1 and...

60.1K

Verified Solution

Question

Accounting

image

A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $600,000; March 31 $700,000; June 30, $500,000; October 30, $900,000. To help finance construction, the company arranged a 9% construction loan on January 1 for $900,000. The company's other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 11% and 6%, respectively Assuming the company uses the weighted-average method, calculate the amount of interest capitalized for the year. (Do not round intermediate calculations. Round your percentage answer to 2 decimal places (ie. O.1234 should be entered as 12.34%).) Date Expenditure Weight Average January 1, 2018 March 31, 2018 June 30, 2018 October 30, 2018 Accumulated expenditures 12/12 600,000 525,000 250,000 150,000 $ 1,525,000 $ 600,000x 700,000x 500,000x 900,000x 9/12 6/12 2/12 $ 2,700,000 apitalized Interest Average Interest Rate Average accumulated expenditures 1,525,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

www princeeduhub com 12 A bomb initially at rest explodes by it self into three...

Basic Math
1.2K views

Which function has an period four times the length of f(x) = -4(cos8x) + 2?a....

Statistics
1.2K views

What level of measurement is household income O Ordinal O Nominal O Ratio O Interval

Calculus
1.2K views

20 15 10 5 y 20 15 10 0 10 15 20 5 10 15...

Accounting
1.2K views

IKIBAN INCORPORATED At June 30 Comparative Balance Sheets Assets Cash Accounts receivable, net Inventory Prepaid...

Accounting
1.2K views

Highsmith Rental Company purchased an apartment building early in 2016. There are 15 apartments in...

Accounting
1.2K views

Dividends per share a company has stock outstanding as follows: 60,000 shares of cumulative preferred...

Accounting
1.2K views

Keesha Co. toma prestados $200 000 en efectivo el 1 de noviembre del ao en...

Accounting
1.2K views

Yield curves change very little in the short run (3 months). ...

Accounting
1.2K views

Using the following additional information, enter the adjustments into the work sheet with the help...

Finance
1.2K views

You are considering two projects. Project A has projected cash flows of $6,500, $4,500, and...

Finance
1.2K views

3 Ignore the information given earlier related to Contact Energy. Assume a cost of debt...