In: Accounting
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 |
$ |
307,000 |
|
September 1, 2018 |
$ |
459,000 |
|
December 31, 2018 |
$ |
459,000 |
|
March 31, 2019 |
$ |
459,000 |
|
September 30, 2019 |
$ |
307,000 |
|
Dreamworld had $5,300,000 in 13% bonds outstanding through both
years.
The average accumulated expenditures for 2019 by the end of the
construction period was:
01/01/2018 | 307,000.00 | 12/12 | 307,000.00 |
01/09/2018 | 459,000.00 | 4/12 | 153,000.00 |
31/12/2018 | 459,000.00 | 0/12 | - |
1,225,000.00 | 460,000.00 |
460,000 x 13% = 59,800
01/01/2019 | 1,284,800.00 | 9/9 | 1,284,800.00 |
31/03/2019 | 459,000.00 | 6/9 | 306,000.00 |
30/09/2019 | 307,000.00 | 0/9 | - |
2,050,800.00 | 1,590,800.00 |
The Correct Answer is 1,590,800