On March 1, Mocl Co. began construction of a small building. The following expenditures were...
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Accounting
On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction:
March 1 $ 300,000 April 1 $ 296,000
May 1 720,000 June 1 1,080,000
July 1 400,000
The building was completed and occupied on July 1. To help pay for construction $200,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $2,000,000, 10% note issued two years ago.
(a) Calculate the weighted-average accumulated expenditures.
(b) Calculate avoidable interest.
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