Solution 1:
Construction of Building - UAE Inc. | |||
Schedule of Weighted-Average accumulated expenditure | |||
Date | Amount | Current year capitalization period | Weighted Average Accumulated Expenditures |
1-Jan-17 | $100,000.00 | 12/12 | $100,000 |
1-Apr-17 | $200,000.00 | 9/12 | $150,000 |
1-Jul-17 | $200,000.00 | 6/12 | $100,000 |
31-Dec-17 | $500,000.00 | 0/12 | $0 |
$1,000,000.00 | $350,000 |
Solution 2:
Total avoidable interest for 2017 = ($225,000 * 12%) + ($125,000*9%) = $38,250
Solution 3:
Actual interest = ($225,000*12%) + ($750,000*9%) = $94,500
Solution 4:
Total cost of project = Total cost + avoidable interest = $1,000,000 + $38,250 = $1,038,250
On January 1, 2017, UAE Inc. began construction of an automated car system. The system was...
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