On March 1, Senegal Inc. began construction of a small building for its own use. Payments of $ 150,000 were made monthly for three 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

To calculate the weighted-average accumulated expenditures, we need to multiply each payment by the number of months it was outstanding, and then divide the total by the number of months in the project.
In this case, the payments were outstanding for 3 months (March, April, and May) and the project was a 3-month project (March, April, and May).
So the calculation would be: 
((150,000 x 3 months) + (0 x 0 months)) / 3 months = $ 75,000

Therefore, option B is the correct answer.