Matrix Inc. borrowed $ 1,000,000 at 8% to finance the construction of a new building for its
Question:
January 1...... $ 252,000 (includes cost of purchasing land of $ 150,000)
May 1........ 310,000
July 1......... 420,000
October 31...... 276,000
In addition, Matrix had additional debt ( unrelated to the construction) of $ 500,000 at 9% and $ 800,000 at 10%. All debt was outstanding for the entire year.
Required:
1. Compute the amount of interest capitalized related to the construction of the building.
2. If the expenditures are assumed to have been incurred evenly throughout the year, compute weighted average accumulated expenditures and the amount of interest capitalized on the building.
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Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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