Question

In: Accounting

Novak Company is constructing a building. Construction began on February 1 and was completed on December...

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 = $

Solutions

Expert Solution

  • Working and answer

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

  • Answer = $ 2,334,000.00


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