Question

On March 1, 2019, Asbah contracted Nabali & Fares Construction Co. to construct a building on land costing $800,000 (purchased from the contractor and included in the first payment). The construction began on the office building on March 1. The following expenditures were incurred for construction:

Date Expenditures

March 1, 2019 $ 1,200,000

May 1, 2019 1,680,000

August 1, 2019 3,000,000

September 30, 2019 4,800,000

The building was completed and ready for occupancy on September 30, 2019. To finance purchase of the land and construction of the building, $1,500,000 was borrowed on March 1, 2019 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2019 was a $1,000,000, 12%, 6-year note payable dated January 1, 2019.

The total cost of the building is

Select one:

a. $ 10,815,000

b. $ 10,063,000

c. $ 10,015,000

d. $ 10,680,000

$ 10,680,000

Answer 1

Answer :

	Answer
	DATE	AMOUNT OF EXPENDECTURE
	march 1 2019	$                        1,200,000.00
	May 1 2019	$                        1,680,000.00
	Agust 1 2019	$                        3,000,000.00
	Septmber 30 2019	$                        4,800,000.00
	Total cost of Building	$                     10,680,000.00
	Answer :
d	$                    10,680,000.00