Question

# On January 1, 2016, the Mason Manufacturing Company began construction of a building to be used...

 On January 1, 2016, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2017. Expenditures on the project were as follows:
 January 1, 2016 \$ 1,000,000 March 1, 2016 800,000 June 30, 2016 1,500,000 October 1, 2016 1,000,000 January 31, 2017 300,000 April 30, 2017 600,000 August 31, 2017 900,000

On January 1, 2016, the company obtained a \$8.000,000 construction loan with a 12% interest rate. The loan was outstanding all of 2016 and 2017. The company’s fiscal year-end is December 31.

1. Calculate the amount of interest capitalized for 2016 and 2017.
2. What is the total cost of the building?
 Date Expenditure Weight Average Accumulated expenditure
 Average Interest Rate Capitalized Interest Average accumulated expenditures x % X  /12 =
 Date Expenditure Weight Average January 1, 2017 (incurred in 2016+ capitalized Interest for 2016) x = Accumulated expenditure

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