Question

Bonita Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6552000 on March 1, $5280000 on June 1, and $8450000 on December 31. Bonita Industries borrowed $3180000 on January 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 8%, 3-year, $6410000 note payable and an 9%, 4-year, $12150000 note payable.

What are the weighted-average accumulated expenditures?
a.20282000 b.8540000 c.9992000 d.11832000

Waterway Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6310000 on March 1, $5350000 on June 1, and $8750000on December 31. Waterway Industries borrowed $3180000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6450000 note payable and an 11%, 4-year, $12650000 note payable.

What is the actual interest for Waterway Industries?
a.935831 b.2450100 c.2022500 d.2418100

Oriole Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6450000 on March 1, $5250000 on June 1, and $8950000 on December 31. Oriole Company borrowed $3220000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6390000 note payable and an 11%, 4-year, $12650000 note payable.

What amount of interest should be charged to expense?

a.2036500 b.1087912 c.1176712 d.1474314

Answer 1

Bonita Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6552000 on March 1, $5280000 on June 1, and $8450000 on December 31. Bonita Industries borrowed $3180000 on January 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 8%, 3-year, $6410000 note payable and an 9%, 4-year, $12150000 note payable.
What are the weighted-average accumulated expenditures?
a.20282000 b.8540000 c.9992000 d.11832000
Date	Payments	Fund used	Annualized
01-Mar	$        65,52,000.00	10/12	$ 54,60,000.00
01-Jun	$        52,80,000.00	7/12	$ 30,80,000.00
31-Dec	$        84,50,000.00	0/12	$                   -
Weighted average expenditure		Option b	$ 85,40,000.00
Waterway Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6310000 on March 1, $5350000 on June 1, and $8750000on December 31. Waterway Industries borrowed $3180000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6450000 note payable and an 11%, 4-year, $12650000 note payable.
What is the actual interest for Waterway Industries?
a.935831 b.2450100 c.2022500 d.2418100
	Loan Amount	Rate %	Interest
Specific loan: Funds for project	3180000	12%	381600
Other loans:For the rest:	6450000	10%	645000
	12650000	11%	1391500
Actual Interest		Option d	$ 24,18,100.00
Oriole Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6450000 on March 1, $5250000 on June 1, and $8950000 on December 31. Oriole Company borrowed $3220000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6390000 note payable and an 11%, 4-year, $12650000 note payable.
What amount of interest should be charged to expense?
a.2036500 b.1087912 c.1176712 d.1474314
	Loan Amount	Rate %	Interest
Other loans:For the rest:	6450000	10%	645000
	12650000	11%	1391500
Actual Interest		Option a	$ 20,36,500.00