Question
On March 1, Jennifer Co. began construction of a small building. The following expenditures were incurred for construction: March 1 $310,500 April 1 269,000 May
On March 1, Jennifer Co. began construction of a small building. The following expenditures were incurred for construction:
| March 1 | $310,500 | |
| April 1 | 269,000 | |
| May 1 | 720,000 | |
| June 1 | 1,101,000 | |
| July 1 | 391,000 |
The building was completed and occupied on July 1. To help pay for construction $210,500 was borrowed on March 1 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. (Do not leave any answer field blank. Enter 0 for amounts.)
| Date | Expenditures | Capitalization Period | Weighted-Average Accumulated Expenditure | ||||
| March 1 | $310,500 | 01/122/123/124/125/126/127/128/129/1210/1211/1212/12 | $ | ||||
| April 1 | 269,000 | 01/122/123/124/125/126/127/128/129/1210/1211/1212/12 | |||||
| May 1 | 720,000 | 01/122/123/124/125/126/127/128/129/1210/1211/1212/12 | |||||
| June 1 | 1,101,000 | 01/122/123/124/125/126/127/128/129/1210/1211/1212/12 | |||||
| July 1 | 391,000 | 01/122/123/124/125/126/127/128/129/1210/1211/1212/12 | |||||
| $ | |||||||
Calculate avoidable interest. (Round answer to 0 decimal places, e.g. 12,515.)
| Avoidable interest | $ |
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Managerial Accounting Creating Value in a Dynamic Business Environment
Authors: Ronald W. Hilton
9th edition
78110912, 978-0078110917
