Q.23 -

A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $580,000; March 31, $680,000; June 30, $480,000; October 30, $840,000. To help finance construction, the company arranged a 7% construction loan on January 1 for $860,000. The companys other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 8% and 6%, respectively. Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%).)

Weight Average 7/12 = $ 40,600 Date January 1 March 31 June 30 October 30 Accumulated expenditures Expenditure $ 580.000 680.000 480,000 840,000 x $ 2.580.000 = $ 40,600 Amount Interest Rate Capitalized Interest Average accumulated expenditures $ $ 40.600 % 0 96 $ $