On March 1, 2010, Dennis Company purchased land for an office site by paying$540,000 cash. Dennis began construction on the office building on March 1.The following expenditures were incurred for construction:March 1, 2010 - $360,000April 1, 2010 - $504,000May 1, 2010 - $900,000June 1, 2010 - $1,440,000The office was completed and ready for occupancy on July 1. To help pay forthe construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-yearnote payable. Other than the construction note, the only debt outstandingduring 2010 was a $300,000, 11%, 6-year note payable dated January 1, 2010.(Hint: Be sure to include the cost of land in the total March 1 expenditureamount)Use commas, but do not use $ signs or cents.1. How much are the weighted-average accumulated expenditures on theconstruction project during 2010? How much was the actual interest cost during 2010?Question 82.5 ptsAssume the weighted average accumulated expenditures for the constructionproject are $870,000.What is the amount of interest cost to be capitalized for 2010?

Step 1 - Weighted-Average Accumulated ExpendituresTo determine the amount of interest cost to be…

Answered: On March 1, 2010, Dennis Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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