Question

On May 1, 2014, Goodman Company began construction of a building. Expenditures of $360,000 were incurred monthly for 5 months beginning on May 1. The building was completed and ready for occupancy on September 1, 2014. For the purpose of determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures on the building during 2014 were

Answer 1

The weighted-average accumulated expenditures on the building during 2014 is $360,000.

Step-by-step explanation:

The weighted-average accumulated expenditures on the building during 2014 can be calculated by multiplying the expenditures incurred each month by the number of months and then dividing by the total number of months. In this case

the monthly expenditure is $360,000 and it was incurred for 5 months starting from May 1. Therefore, the weighted-average accumulated expenditures would be: ($360,000 imes 5) / 5 = $360,000 So, the weighted-average accumulated expenditures on the building during 2014 is $360,000.

the calculation is simplified. The total expenditure would be $360,000 multiplied by 5 months, amounting to a total of $1,800,000. This entire amount would be considered the accumulated expenditures since there are no complexities such as uneven spending or different project stages that would require a more complicated weighted average.