Question

Flounder Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,052,000 on March 1, $1,200,000 on June 1, and $3,003,300 on December 31. Flounder Company borrowed $1,034,800 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,316,100 note payable and an 11%, 4-year, $3,193,700 note payable. Compute avoidable interest for Flounder Company. Use the weighted-average interest rate for interest capitalization purposes. (Round percentages to 2 decimal places, e.g. 2.51% and final answer to 0 decimal places, e.g. 5,275.) Avoidable interest $enter the avoidable interest in dollars rounded to 0 decimal places

Answer 1

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