Question

In: Accounting

On April 1, Paine Co. began construction of a small building. Payments of $234,960 were made...

On April 1, Paine Co. began construction of a small building. Payments of $234,960 were made monthly for four months beginning on April 1. The building was completed and ready for occupancy on August 1. For the purpose of determining the amount of interest cost to be capitalized, calculate the weighted-average accumulated expenditures on the building by completing the schedule below:

Date Expenditures Capitalization Period Weighted-Ave. Accum. Expend.
$ $
  
$

Solutions

Expert Solution

Answer
Paine Co.
Weighted-Average accumulated expenditure
Date Amount Capitalization period Weighted Average Accumulated Expenditures
01-Apr $    234,960 4/12 $                  78,320
01-May $    234,960 3/12 $                  58,740
01-Jun $    234,960 2/12 $                  39,160
01-Jul $    234,960 1/12 $                  19,580
$    939,840 $                195,800

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

On April 1, Paine Co. began construction of a small building. Payments of $180,000 were made...
On April 1, Paine Co. began construction of a small building. Payments of $180,000 were made monthly for four months beginning on April 1. The building was completed and ready for occupancy on August 1. For the purpose of determining the amount of interest cost to be capitalized, calculate the weighted-average accumulated expenditures on the building by completing the schedule below:             Date               Expenditures       Capitalization Period      Weighted-Average Expenditures Question 2 On March 1, Mocl Co. began construction of a small...
On March 1, Imhoff Co. began construction of a small building. Payments of $400,000 were made...
On March 1, Imhoff Co. began construction of a small building. Payments of $400,000 were made monthly for four months beginning March 1. The building was completed and ready for occupancy on June 1. In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are? How would I calculate this? You probably will answer that $400,000 * ((3/12)+(2/12)+1/12))=200,000 But Why is that weighted as 3/12, 2/12 and 1/12 if the project was outstanding just for 3...
On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred...
On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction: March 1 $315,000 April 1 254,000 May 1 751,500 June 1 1,152,000 July 1 391,000 The building was completed and occupied on July 1. To help pay for construction $215,000 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...
Construction of a new building began on April 1 and was completed on October 29. Construction...
Construction of a new building began on April 1 and was completed on October 29. Construction expenditures were as follows: May 1 $3,300,000 July 30 2,200,000 September 1 1,740,000 October 1 2,640,000 MMI borrowed $5,000,000 at 6% on April 1 to help finance construction. This loan, plus interest, will be paid in 2022. The company also had a $6,650,000, 8% long-term note payable outstanding throughout 2021. Weighted Average Accumulated Expenditures were: [Round expenditure to nearest dollar] Date Expenditure Months financed...
Construction of a new building began on April 1 and was completed on October 29. Construction...
Construction of a new building began on April 1 and was completed on October 29. Construction expenditures were as follows: May 1 $3,300,000 July 30 2,200,000 September 1 1,740,000 October 1 2,640,000 MMI borrowed $5,000,000 at 6% on April 1 to help finance construction. This loan, plus interest, will be paid in 2022. The company also had a $6,650,000, 8% long-term note payable outstanding throughout 2021. Weighted Average Accumulated Expenditures were: [Round expenditure to nearest dollar] Date Expenditure Months financed...
XYZ Corp began construction on a building on January 1, 2016. On that date, it made...
XYZ Corp began construction on a building on January 1, 2016. On that date, it made its first $500,000 payment. An additional $600,000 were paid on 4/1/2016 and $300,000 was paid on 7/1/2016. A final payment of $100,000 was made on 12/31/2016, which is also the date when the construction project was finished and the building was ready to use. To finance the project, XYZ Corp issued a $800,000 10% note. Furthermore, XYZ Corp had a $2,000,000 5% note outstanding...
XYZ Corp began construction on a building on January 1, 2016. On that date, it made...
XYZ Corp began construction on a building on January 1, 2016. On that date, it made its first $500,000 payment. An additional $600,000 were paid on 4/1/2016 and $300,000 was paid on 7/1/2016. A final payment of $100,000 was made on 12/31/2016, which is also the date when the construction project was finished and the building was ready to use. To finance the project, XYZ Corp issued a $800,000 10% note. Furthermore, XYZ Corp had a $2,000,000 5% note outstanding...
On January 1, 2020, Lawrence Co. began construction of a building to be used as its...
On January 1, 2020, Lawrence Co. began construction of a building to be used as its office headquarters. The building is expected to be completed on December 31, 2020. Expenditures on this project during 2020 were as follows:                 January 1st          $ 160,000 March 1st               420,000 June 1st                  270,000 October 31st           165,000 On Jan. 1, 2020, the company obtained a $600,000 specific construction loan with a 7% interest rate. The loan was outstanding during the entire construction period. The company’s...
On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 326,000 September 1, 2021 $ 477,000 December 31, 2021 $ 477,000 March 31, 2022 $ 477,000 September 30, 2022 $ 326,000 Dreamworld had $5,900,000 in 12% bonds outstanding through both years. What was the final cost of Dreamworld's warehouse?
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished...
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2019. Expenditures on the project were as follows: January 1, 2018 $ 300,000 September 1, 2018 $ 450,000 December 31, 2018 $ 450,000 March 31, 2019 $ 450,000 Dreamworld had the following debt obligations outstanding during both years: Construction loan, 10%             $500,000              Long-term note, 12%                      $2,500,000 Required: What would Dreamworld's capitalized interest be in 2019 (assuming interest...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT