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Swifty Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,824,000 on March 1, $1,224,000 on June 1, and $3,015,000 on December 31. Swifty Company borrowed $1,052,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,132,000 note payable and an 11%, 4-year, $3,215,000 note payable. Compute avoidable interest for Swifty Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $ 61328.63

Swifty Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,824,000 on March 1, $1,224,000 on June 1, and $3,015,000 on December 31. Swifty Company borrowed $1,052,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,132,000 note payable and an 11%, 4-year, $3,215,000 note payable. Compute avoidable interest for Swifty Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $ 61328.63

FINANCIAL ACCOUNTING
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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Swifty Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,824,000 on March 1, $1,224,000 on June 1, and $3,015,000 on December 31. Swifty Company borrowed $1,052,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,132,000 note payable and an 11%, 4-year, $3,215,000 note payable. Compute avoidable interest for Swifty Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $ 61328.63
Transcribed Image Text:Swifty Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,824,000 on March 1, $1,224,000 on June 1, and $3,015,000 on December 31. Swifty Company borrowed $1,052,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,132,000 note payable and an 11%, 4-year, $3,215,000 note payable. Compute avoidable interest for Swifty Company. Use the weighted-average interest rate for interest capitalization purposes. (Round weighted- average interest rate to 4 decimal places, e.g. 0.2152 and final answer to O decimal places, e.g. 5,275.) Avoidable interest $ 61328.63
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