On March 1, 2007, Dennis Company purchased land for an office site by paying $540,000 cash.  Dennis began construction on the office building on March 1. The following expenditures were incurred for construction:

Date                                                   Expenditures

March 1, 2007                                     $   360,000

April 1, 2007                                             504,000

May 1, 2007                                             900,000

June 1, 2007                                         1,440,000

 

The office was completed and ready for occupancy on July 1.  To help pay for construction, $720,000 was borrowed on March 1, 2007 on a 9%, 3-year note payable.  Other than the construction note, the only debt outstanding during 2007 was a $300,000, 12%, 6-year note payable dated January 1, 2007.

 

The weighted-average accumulated expenditures on the construction project during 2007 were

• $384,000. 
• $2,934,000. 
• $312,000. 
• $696,000.