ent | CALCULATOR FULLSCREEN PRINTER VERSION BACK NEXT Problem 10-7 (Part Level Submission) Kingbird Inc. is a book distributor that had been operating in its original facility since 1987. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for Kingbird ce 2012. Kingbird original facility became obsolete by early 2017 beca and the fact that Kingbird now carries CDs in addition to books. use of the increased sales volume On June 1, 2017, Kingbird contracted with Black Construction to have a new building constructed for $4,880,000 on land owned by Kingbird. The payments made by Kingbird to Black Construction are shown in the schedule below. Date Amount July 30, 2017 anuary 30, 2018 May 30, 2018 $1,098,000 1,830,000 1,952,000 $4,880,000 Total payments Construction was completed and the building was ready for occupancy on May 27, 2018. Kingbird had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2018, the end of its fiscal year 10%, 5-year note payable of S2,440,000, dated April 1, 2014, with interest payable annually on April i. 12%, 10-year bond issue of S3,660,000 sold at par on June 30, 2010, with interes? pardle annually on june The new building qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material. Compute the weighted-average accumulated expenditures on Kingbird's new building during the capitalization periocd. Weighted-Average Accumulated Expenditures policy 200-20 lughn w s a sans. Ins. AllRghts.Reserye . A Division of ha yus, asone. Inc. 39 P