Question
ABC borrowed $300,000 at 10% to fund the construction of a specialized piece of equipment. ABC has 1,000,000 bonds outstanding at 8%. ABC made the
ABC borrowed $300,000 at 10% to fund the construction of a specialized piece of equipment. ABC has 1,000,000 bonds outstanding at 8%.
ABC made the following expenditures on the dates below:
| 1/1/2019 | $250,000 |
| 4/1/2019 | $ 250,000 |
| 7/1/2019 | $ 100,000 |
| 10/1/2019 | $ 300,000 |
The equipment was finished and ready for use on 10/1/2019.
What is the weighted average accumulated expenditure related to the construction of this piece of equipment?
What is the avoidable interest?
What is the total cost of the equipment?
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Financial And Managerial Accounting The Basis For Business Decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
19th Edition
1260247937, 978-1260247930
