Question

On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction: March 1 $226,560 Apri1 219,840 June1 803,880 July 1306,480 541,320 | The building was completed and occupied on July 1 . To help pay for construction $151,440 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. Calculate the weighted-average accumulated expenditures. (Do not leave any answer field blank. Enter 0 for amounts.) Weighted-Average Date ExpendituresCapitalization Period Accumulated Expenditure 7552 March 1$226,560 219,840 541,320 803,880 306,480 April 1 May 1 June 1 July 1 4/12 3/12 2/12 1/12 5496 90220 287690

Answer 1

Calculation of the weighted average accumulated expenditures
Date	Expenditures	Capitalization period	weighted average acc exp
Mar-01	226560	4/12	75520
Apr-01	219840	3/12	54960
May-01	541320	2/12	90220
Jun-01	803880	1/12	66990
Jul-01	306480	00/12	0
Weighted average accumulated exp			287690
Calculation avoidable interest
Weighted avg acc exp	Rate	Interest
151440	12%	18173
136250	10%	13625
287690		31798