In Progress Laserwords Inc. is a book distributor that had been operating in its original facility since 1995. The increase in certification programs and continuing education requirements in several professions has contributed to an annual growth rate of 15% for Laserwords since 2020. Laserwords' original facility became obsolete by early 2025 because of the increased sales volume and the fact that Laserwords now carries DVDs in addition to books. On June 1, 2025, Laserwords contracted with Black Construction to have a new building constructed for $4,000,000 on land owned by Laserwords. The payments made by Laserwords to Black Construction are shown in the schedule below. Date July 30, 2025 January 30, 2026 May 30, 2026 Total payments Amount $900,000 1,500,000 1,600,000 $4,000,000 Construction was completed and the building was ready for occupancy on May 27, 2026. Laserwords had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2026, the end of its fiscal year. 10%, 5-year note payable of $2,000,000, dated April 1, 2022, with interest payable annually on April 1.

Laserwords inc is a book distributor that had been operating in its original facility since 1995 . The increase in certifcation programs and continuing education requirements in several peofessions has contributed to an annist growth rate of 15% for 1 aserwords tince 2020. Laserwords' original facility became obsolete by early 2025 because of the increased sales volume and the fact that Liserwords now carries DVDs in addition to books. On June 1,2025, taserwords contracted with Biack Construction to have a new building constructed for 54,000,000 on land owned by Laserwords. The payments made by Laserwords to Black Construction are shown in the schedule below. Construction was completed and the bulilding was ready for occupancy on May 27, 2026. Laserwords had no new borrowings directly associated with the new building but had the following debt outstanding at May 31, 2026, the end of its fiscal year: 10%,5-year note payable of $2,000,000, dated April 1,2022 , with interest payable annually on April 1. Construction was completed and the building was ready for occupancy on May 27, 2026. Laserwords had no new borrowings directly associated with the new building bot had the following debt outstanding at May 31, 2026, thenent of its fiscat year. 10\%, 5-year note payable of $2,000,000, dated April 1,2022, with interest payable annually on April 1. 12\%6, 10-vear bond issue of $3,000,000 sold at par on June 30,2018 , with interest payable annually on fune 30 . The new bullding qualifies for interest capitalization. The effect of capitalizing the interest on the new building, compared with the effect of expensing the interest, is material. (a) Compute the weighted-average accumulated expenditures on Laserwords' new building during the capitalization period, Weighted-average accumulated expenditures Compute the avoidsbie interest on Laserwords new buliding. (Round intermediote percentage calculation to 1 decimal place, es: 15. As and finclanner to o dechal placts, es 5,125) Avoidabe interest eTextbook and Media Attempts: unlimited Some interest cost of Laserwords inc. is capitalized for the vear ended May 31, 2026. Compute the amount of each of the items that must be disclosed in Laserwords' financial statements. Total actual interest cost Totalinterest capitalized Total interest expensed