Question
On March 1, Faye Co. began construction of a small building. The following expenditures were incurred for construction: March 1 $ 75,000 April 1 $
On March 1, Faye Co. began construction of a small building. The following expenditures were incurred for construction:
March 1 $ 75,000 April 1 $ 74,000
May 1 180,000 June 1 270,000
July 1 100,000
The building was completed and occupied on July 1. To help pay for construction $50,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $500,000, 10% note issued two years ago.
REQUIRED:
1) Calculate the weighted-average accumulated expenditures.
2) Calculate the actual interest cost.
3) Calculate the amount of interest to be capitalized.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started