Hackleman Company is constructing a building.Construction began in 2008 and the building was completed 12/31/08.Hackleman made payments to the construction company of $1,500,000 on 7/1, $3,300,000 on 9/1, and $3,000,000 on 12/31.Average accumulated expenditures were

Question

Quizplus · Accepted Answer

The average accumulated expenditures can be calculated by adding all the payments made by the company and dividing it by the number of months from the start of construction to the completion date.

Total payments = $1,500,000 + $3,300,000 + $3,000,000 = $7,800,000

Number of months = 12 (from January to December)

Average accumulated expenditures = $7,800,000 / 12 = $650,000

Therefore, the best choice is B, which is $1,850,000.

Hackleman Company Is Constructing a Building