Question
Klutlan Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31, 2019. No new loans were required to
Klutlan Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31, 2019. No new loans were required to fund construction. Klutlan does have the following two interest-bearing liabilities that were outstanding throughout the construction period:
$2,000,000, 8% note
$8,000,000, 5% bonds
Construction expenditures incurred were as follows:
July 1, 2018 $520,000
September 30, 2018 600,000
November 30, 2018 600,000
January 30, 2019 540,000
The company's fiscal year-end is December 31.
Question The total value of the warehouse at the end of construction would be:
a $2,288,000
b $2,317,702
c $1,745,760
d $2,260,000
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