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Q5. Use the following information to answer Q5a, Q5b, Q5c & Q5d. During 2019 Alf Co. constructed a warehouse for its own use. Construction began

Q5. Use the following information to answer Q5a, Q5b, Q5c & Q5d.

During 2019 Alf Co. constructed a warehouse for its own use. Construction began on Jan 1, 2019 and was completed on Dec 31, 2019. Expenditures were $2,400,000 on March 1, $1,980,000 on June 1, and $3,000,000 on December 31. Alf borrowed $1,200,000 on Jan 1 on a 5-year, 12% note to help finance construction of the warehouse. In addition, Alf had outstanding all year a 10%, 3-year, $4,500,000 note payable and an 11%, 4-year, $2,400,000 note payable. Alfs financial year ends Dec 31, and it depreciates buildings over 30 years on a straight-line basis assuming no residual value.

Q5a. What is the weighted average accumulated expenditure? [1 mark]

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Date

$

Weighted Average Accumulated Expenditure $

Q5b. What is the weighted average interest rate used for interest capitalization? [1 mark]

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Answer $

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