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 - $360,000 April 1, 2010 - $504,000 May 1, 2010 - $900,000 June 1, 2010 - $1,440,000 The office was completed and ready for occupancy on July 1. To help pay for the construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 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 expenditure amount) Use commas, but do not use $ signs or cents. 1. How much are the weighted-average accumulated expenditures on the construction project during 2010? How much was the actual interest cost during 2010? Question 8 2.5 pts Assume the weighted average accumulated expenditures for the construction project are $870,000. What is the amount of interest cost to be capitalized for 2010?
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 - $360,000 April 1, 2010 - $504,000 May 1, 2010 - $900,000 June 1, 2010 - $1,440,000 The office was completed and ready for occupancy on July 1. To help pay for the construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 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 expenditure amount) Use commas, but do not use $ signs or cents. 1. How much are the weighted-average accumulated expenditures on the construction project during 2010? How much was the actual interest cost during 2010? Question 8 2.5 pts Assume the weighted average accumulated expenditures for the construction project are $870,000. What is the amount of interest cost to be capitalized for 2010?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 40P
Related questions
Question
Transcribed Image Text: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 - $360,000
April 1, 2010 - $504,000
May 1, 2010 - $900,000
June 1, 2010 - $1,440,000
The office was completed and ready for occupancy on July 1. To help pay for
the construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year
note payable. Other than the construction note, the only debt outstanding
during 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 expenditure
amount)
Use commas, but do not use $ signs or cents.
1. How much are the weighted-average accumulated expenditures on the
construction project during 2010?
Transcribed Image Text:How much was the actual interest cost during 2010?
Question 8
2.5 pts
Assume the weighted average accumulated expenditures for the construction
project are $870,000.
What is the amount of interest cost to be capitalized for 2010?
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