Assume the weighted-average accumulated expenditures for the construction project are $2,900,000. The amount of interest cost to be capitalized during 2014 is

Question

Quizplus · Accepted Answer

To determine the amount of interest cost to be capitalized, we need to use the following formula:

Interest Cost = Weighted-Average Accumulated Expenditures x Weighted-Average Interest Rate

Assuming the weighted-average interest rate is 9%, we can calculate the interest cost as follows:

Interest Cost = $2,900,000 x 9% = $261,000

Therefore, the correct answer is choice B ($276,000).

Assume the Weighted-Average Accumulated Expenditures for the Construction Project Are