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Question 1 Early in 2014, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2014 and was completed on December 31, 2014. Dobbs made the following payments to Kiner, Inc. during 2014:

Date Payment

1-Jun-14 $5,796,000

31-Aug-14 9240000

31-Dec-14 7,464,000

In order to help finance the construction, Dobbs issued the following during 2014:

1. $5,120,000 of 10-year, 9% bonds payable, issued at par on May 31, 2014, with interest payable annually on May 31.

2. 1,000,000 shares of no-par common stock, issued at $10 per share on October 1, 2014 I

n addition to the 9% bonds payable, the only debt outstanding during 2014 was a $1,284,000, 12% note payable dated January 1, 2010 and due January 1, 2020, with interest payable annually on January 1.

Compute the amounts of each of the following

1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost.

2. Avoidable interest incurred during 2014.

3. Total amount of interest cost to be capitalized during 2014.

1. Weighted-average accumulated expenditures $

2. Avoidable interest $

3. Amount of interest cost to be capitalized $

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