Solution-Calculate weighted average amount of accumulated

Calculate weighted average amount of accumulated expenditure

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Question - On January 1, 2020, ABC Company began construction of a building to be used as its warehouse. The building was completed on November 1, 2021. Expenditures for the project during 2020 were as follows:

January 1, 2020	900,000
April 1, 2020	700,000
July 1, 2020	650,000
October 1, 2020	840,000

On January 1, 2020, ABC Company obtained a $1,000,000 construction loan with 10% interest rate payable in 5 years. The Company's other debts included a note of $2,000,000 at 11% interest rate for 3 years and a bond of $4,000,000 at 8% interest rate for 10 years.

Required -

A. Calculate the weighted average amount of accumulated expenditures for the building at December 31, 2020.

B. Calculate the amount of interest that ABC Company should capitalize in 2020.

Reference no: EM133095860

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Calculate weighted average amount of accumulated expenditure

Reference no: EM133095860

Reference no: EM133095860

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