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Question
On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction: March 1 $ 225,000 April 1 $ 221,760 May 1 534,120 June 1 794,640 July 1 306,000.
The building was completed and occupied on July 1. To help pay for construction $153,000 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.
Instructions
(a) Calculate the weighted-average accumulated expenditures.
(b) Calculate avoidable interest.
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