Question: A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as

A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $670,000; March 31, $770,000; June 30, $570,000; October 30, $1,110,000. To help finance construction, the company arranged a 8% construction loan on January 1 for $1,040,000. The companys other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 9% and 6%, respectively. Assuming the company uses the specific interest method, calculate the amount of interest capitalized for the year. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. 0.1234 should be entered as 12.34%).

Date Expenditure Weight Average

January 1

March 31

June 30

October 30

Accumlated Expenditures

Average Interest Rate Capitalized Interest

Average accumulated expenditures

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