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Bonita Industries is constructing a building. Construction began on January 1 and was completed on December...

Bonita Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6440000 on March 1, $5260000 on June 1, and $8850000 on December 31. Bonita Industries borrowed $3190000 on January 1 on a 5-year, 11% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 3-year, $6440000 note payable and an 10%, 4-year, $12650000 note payable.

What are the weighted-average accumulated expenditures?

$11700000

$9860000

$8435000

$20550000

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Answer #1

Calculate weighted average accumulated expenditure

Mar 1 (6440000*10/12) 5366667
June 1 (5260000*7/12) 3068333
Dec 31 (8850000*0/12) 0
Total 8435000

So answer is c) $8435000

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