Brief Exercise 133 Warning Don\'t show me this message again for the assignment
ID: 2501715 • Letter: B
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Brief Exercise 133
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Brief Exercise 133
On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction:March 1 $226,680 April 1 220,680 May 1 541,560 June 1 802,560 July 1 310,320
The building was completed and occupied on July 1. To help pay for construction $148,800 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $1,500,000, 10% note issued two years ago.
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Explanation / Answer
a. weighted average accumulated expenditure :
Date Expenditure Capitalization period weighted average accumulated expenditure
1. March 226680 226680 * 12/12 $226680
1.April 220680 220680 * 11/12 $202290
1.May 541560 541560 * 10/12 $451300
1.June 802560 802560*9/12 $601920
1.July 310320 310320*8/12 $206880
Total $ 1689070
Note:- Capitalziation period = Month of expenditure / 12
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