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On March 1 Faye Co began construction of a small building Thefollowing expenditures were incurred for construction March 1 $ 75000 April1 $ 74000

On March 1, Faye Co. began construction of a small building. Thefollowing expenditures were incurred for construction:

                               March 1 $ 75,000       April1    $ 74,000

                               May 1     180,000       June 1  270,000

                               July 1      100,000

         The building wascompleted and occupied on July 1. To help pay for construction$50,000 was borrowed on March 1 on a 12%, three-year note payable.The only other debt outstanding during the year was a $500,000, 10%note issued two years ago.

         REQUIRED:

 

1) Calculate the weighted-average accumulated expenditures.

2) Calculate the actual interest cost.

3) Calculate the amount of interest to be capitalized.

 

Mar 23 2020 View more View Less

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