Alzparker Company constructed a building at a total actual cost of $30,000,000. Weighted-average accumulated expenditures during the construction period amounted to $23,000,000. As a result of financing arrangements, actual interest was $1,820,000, and avoidable interest was $1,600,000. What is the capitalized cost of the building?
A) $24,820,000
B) $31,600,000
C) $31,820,000
D) $33,420,000

Question

Quizplus · Accepted Answer

The capitalized cost of the building is the actual cost of construction plus the avoidable interest. Therefore, $30,000,000 + $1,600,000 = $31,600,000.

Alzparker Company Constructed a Building at a Total Actual Cost