Question
Capitalization of interest (15 points) . On March 1 2020, Mocl Co. began construction of a building. The following expenditures were incurred for construction: March
- Capitalization of interest (15 points).
On March 1 2020, Mocl Co. began construction of a building. The following expenditures were incurred for construction:
| March 1, 2020 | $300,000 |
| June 1, 2020 | 296,000 |
| July 1, 2020 | 720,000 |
| January 1, 2021 | 1,080,000 |
| February 28, 2021 | 400,000 |
The building was completed and occupied on March 1, 2021. To help pay for construction, $1,000,000 was borrowed on March 1, 2020 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.
- Calculate the weighted-average accumulated expenditures (10 points).
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weighted-average accumulated expenditures |
$ | |
- Calculate avoidable interest (5 points).
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Avoidable Interest |
$ | |
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Financial and managerial accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
1st edition
111800423X, 9781118233443, 1118016114, 9781118004234, 1118233441, 978-1118016114
