On May 1, 2010, Lloyd Company began construction of a building.Expenditures of $75,000 were incurred monthly for five months beginning on May 1.The building was completed and ready for occupancy on September 1, 2010.For the purpose of
Determining the amount of interest cost to be capitalized, the average accumulated
Expenditures on the building during 2010 were

Question

Quizplus · Accepted Answer

To determine the average accumulated expenditures, we need to add up the expenditures for each month and divide by the number of months.

Total expenditures = $75,000 x 5 = $375,000
Average accumulated expenditures = $375,000 / 6 months = $62,500

Therefore, the answer is B.

On May 1, 2010, Lloyd Company Began Construction of a Building.Expenditures