In: Accounting
Novak Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,944,000 on March 1, $1,224,000 on June 1, and $3,072,650 on December 31. Compute Novak’s weighted-average accumulated expenditures for interest capitalization purposes.
Weighted-Average Accumulated Expenditures = $
Expenditure |
Accumulated Expenditure |
No. of month for average |
Weighted Average Accumulated Expenditure |
|
$ 1,944,000.00 Mar 1 |
$ 1,944,000.00 |
3 |
$ 486,000.00 |
[1944000 x 3/12] |
$ 1,224,000.00 Jun 1 |
$ 3,168,000.00 |
7 |
$ 1,848,000.00 |
[3168000x7/12] |
$ 3,072,650.00 Dec 31 |
$ 6,240,650.00 |
0 |
$ - |
[6240650 x 0/12] |
Answer: Weighted Average Accumulated Expenditure |
$ 2,334,000.00 |