Use the following information for questions.
On March 1, 2017, Mauritania Ltd.purchased land for $270,000 cash, which they intend to use for their new head office.Construction on the office building began on March 1.The following expenditures were incurred for construction: The office building was completed and ready for occupancy on July 1.To help pay for construction, Mauritania borrowed $360,000 on March 1, 2017 on a 9%, three-year note payable.Other than this note, the only other debt outstanding during 2017 was a $150,000, 10%, six-year note payable dated January 1, 2016.
-The weighted-average accumulated expenditures on the construction project during 2017 were

Question

Use the following information for questions.
On March 1, 2017, Mauritania Ltd.purchased land for $270,000 cash, which they intend to use for their new head office.Construction on the office building began on March 1.The following expenditures were incurred for construction:  The office building was completed and ready for occupancy on July 1.To help pay for construction, Mauritania borrowed $360,000 on March 1, 2017 on a 9%, three-year note payable.Other than this note, the only other debt outstanding during 2017 was a $150,000, 10%, six-year note payable dated January 1, 2016.
-The weighted-average accumulated expenditures on the construction project during 2017 were

Quizplus · Accepted Answer

The weighted-average accumulated expenditures on the construction project during 2017 can be calculated as follows:
Expenditures from March 1 to December 31 = $594,000
($270,000 land purchase + $324,000 construction expenditures)
Weighted-average accumulated expenditures = $324,000 x 9/12 + $270,000 x 3/12 = $348,000

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