A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $680,000; March 31, $780,000; June 30, $580,000; October 30, $1,140,000. To help finance construction, the company arranged a 9% construction loan on January 1 for $1,060,000. The company's other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 10% and 8%, respectively. Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year. Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%). Date January 1 March 31 June 30 October 30 Accumulated expenditures Average accumulated expenditures Expenditure Amount X X X Weight Interest Rate % % "1 II = = Average Capitalized Interest
A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $680,000; March 31, $780,000; June 30, $580,000; October 30, $1,140,000. To help finance construction, the company arranged a 9% construction loan on January 1 for $1,060,000. The company's other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 10% and 8%, respectively. Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year. Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%). Date January 1 March 31 June 30 October 30 Accumulated expenditures Average accumulated expenditures Expenditure Amount X X X Weight Interest Rate % % "1 II = = Average Capitalized Interest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for
construction were as follows: January 1, $680,000; March 31, $780,000; June 30, $580,000; October 30, $1,140,000. To help finance
construction, the company arranged a 9% construction loan on January 1 for $1,060,000. The company's other borrowings,
outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 10% and 8%, respectively.
Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year.
Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage
answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%).
Date
January 1
March 31
June 30
October 30
Accumulated expenditures
Average accumulated expenditures
Expenditure
Amount
X
X
X
Weight
Interest Rate
%
%
"1
II
=
=
Average
Capitalized
Interest](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb0550094-787d-49cf-b4d4-1b0926b65c9d%2F9faf45ea-5100-4887-ad82-f9c3d16d4687%2Fi921yad_processed.png&w=3840&q=75)
Transcribed Image Text:A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for
construction were as follows: January 1, $680,000; March 31, $780,000; June 30, $580,000; October 30, $1,140,000. To help finance
construction, the company arranged a 9% construction loan on January 1 for $1,060,000. The company's other borrowings,
outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 10% and 8%, respectively.
Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year.
Note: Enter your answers in whole dollars and not in millions. Do not round intermediate calculations. Round your percentage
answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%).
Date
January 1
March 31
June 30
October 30
Accumulated expenditures
Average accumulated expenditures
Expenditure
Amount
X
X
X
Weight
Interest Rate
%
%
"1
II
=
=
Average
Capitalized
Interest
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