On July 31, 2025, Oriole Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Oriole issued a $326,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $217,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Oriole made a final $109,000 payment to Minsk. Other than the note to Netherlands, Oriole's only outstanding liability at December 31, 2025, is a $31,400, 8%, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted average accumulated expenditures $ Avoidable interest Interest capitalized

On July 31, 2025, Oriole Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Oriole issued a $326,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $217,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Oriole made a final $109,000 payment to Minsk. Other than the note to Netherlands, Oriole's only outstanding liability at December 31, 2025, is a $31,400, 8%, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted average accumulated expenditures $ Avoidable interest Interest capitalized

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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