On March 1, Imhoff Co.began construction of a small building.Payments of $180,000 were made monthly for four months beginning March 1.The building was completed and ready for occupancy on June 1.In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are

Question

Quizplus · Accepted Answer

The weighted-average accumulated expenditures are calculated as follows:Month 1: $180,000 x 4/12 = $60,000Month 2: $180,000 x 3/12 = $45,000Month 3: $180,000 x 2/12 = $30,000Month 4: $180,000 x 1/12 = $15,000Total weighted-average accumulated expenditures: $60,000 + $45,000 + $30,000 + $15,000 = $150,000