Calculating Avoidable Interest Weighted average accumulated expenditures are $720,000 on a project for which work steadily progressed during the current year The following debt was outstanding during the current year Construction loan $180,000 at 10 Note payable $900,000 at 8 Mortgage payable $270,000 at 12 Calculate avoidable interest for the purpose of interest capitalization Note Round interest rate percentage used in your calculation to two decimal places (for example, enter 2 05 for 2 04555 ) Avoidable interest $Answer

Question: Calculating Avoidable Interest Weighted average accumulated expenditures are $720,000 on a project for which work steadily progressed during the current year. The following debt was

Calculating Avoidable Interest

Weighted average accumulated expenditures are $720,000 on a project for which work steadily progressed during the current year. The following debt was outstanding during the current year.

Construction loan		$180,000 at 10%
Note payable		$900,000 at 8%
Mortgage payable		$270,000 at 12%

Calculate avoidable interest for the purpose of interest capitalization.

Note: Round interest rate percentage used in your calculation to two decimal places (for example, enter 2.05 for 2.04555%).

Avoidable interest $Answer

Step by Step Solution

★★★★★

3.40 Rating (153 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Particulars 8 Note payable 12 Mortgage payable Total Weigted average interes... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Civil Engineering Questions!

A contractor submits a bid on a project for which more research and development work needs to be done. It is estimated that the total cost of satisfying the project specifications will be $20 million...

During the current year, Marketplace Consulting Group acquired long-term available-for-sale securities at an $85,000 cost. At its December 31 year-end, these securities had a fair value of $62,000....

During the current year ended December 31, Rank Company disposed of three different assets. On January I of the current year, prior to their disposal, the asset accounts reflected the following: The...

Yawyag Corporation engaged Sir Peter, Inc. to design and construct a manufacturing facility. Construction began on January 2 and was completed on December 31 of the current year. The following...

Assume that the project in E11- 8 was not completed in Year 1. Yawyag was required to make two additional payments to the contractor in Year 2: $ 900,000 on April 1 and $ 1,800,000 on August 1 of...

Assume that the Yawyag Corporation in E11- 8 is an IFRS reporter and answer the following: Required a. Compute the weighted- average accumulated expenditures for the current year. b. Compute the...

Ritt Ranch & Farm is a distributor of ranch and farm equipment. Its products include small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are...

On June 15,201 1, a second-hand machine was purchased for$77,000. Before being put into service, the equipment was overhauled at a cost of$5,200, and additional costs of $400 for direct material and...

Luna Martinez, director of personnel at Management Resources, Inc., is in the process of designing a program that its customers can use in the job-finding process. Some of the activities include...

Multiple Choice. Choose the best answer. 1. Special purpose governments differ from general purpose governments in that special purpose governments: a. Provide a single function or limited range of...

Describe a business owners policy, including the types of insurance coverage available with a BOP. List the advantages of this type of policy.

Linear Equations Solve the linear equation: dy / dx + y = e ^ x .

Suppose you select one value from a uniform distribution with a = 0 and b = 10. What is the probability that the value will be a. Between 5 and 7? b. Between 2 and 3? c. What is the mean? d. What is...

The Voiture Company manufactures compact, energy efficient cars. On April 1, it purchased a machine for its assembly line at a contract price of $200,000 with terms of 2/10, n/30. The company paid...

Bonfiglio Company imports art and artifacts from Italy and Spain and sells them in its Bonfiglio Gallery in London. At the end of 20X2 Bonfiglio had the following trial balance: 1. Prepare closing...

Guthrie Inc. must determine whether the following items are included in property, plant, and equipment: a. idle equipment awaiting sale b. machinery kept on hand and used only when other machinery...

Multiple Select Question ()) Select all that apply A flexible budget shows what budgeted amounts should have been at the actual level of activity. As a result of this change in activity, the flexible...

Computing and Recording Interest Capitalization The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in January of next year. The...

i need help with excel homework 1- Wade Company use the Gross Profit method to estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The following...

just help a brother out You were recently named the Head of Corporate Development for Company X. Company X has a February 28 fiscal year end and needs to report its 2021 annual financial results. You...

Need help with this assignment.I've attached the excel workbook that should be used to record answers and the case scenario. The case discusses the dilemma of the CFO of PSUWC Energy LLC, an energy...

Attempts: Average: 12 1. The basic WACC equation The calculation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and common equity, where...

Calculating weighted Average Accumulated Expenditures Jole Company made the following cash expenditures this year on a self-constructed building with work starting January 2, 2020, Date Amount 2...