Question

Gutierrez Company is constructing a building. Construction began in 2014 and the building was completed on 12/31/14. Gutierrez made payments to the construction company of $2,500,000 on 7/1, $5,500,000 on 9/1, and $5,000,000 on 12/31. Weighted-average accumulated expenditures were __________.

Answer 1

The weighted-average accumulated expenditures can be calculated by multiplying the amount spent on each date by the number of days between that date and the completion date, and then dividing the sum by the total number of days in the construction period.

Step-by-step explanation:

The weighted-average accumulated expenditures can be calculated by multiplying the amount spent on each date by the number of days between that date and the completion date, and then dividing the sum by the total number of days in the construction period.

For example, the first payment of $2,500,000 was made on 7/1, which is 183 days before 12/31. So, the weighted expenditure for that payment is $2,500,000 * 183/365 = $1,250,000.

By performing similar calculations for the other two payments and adding the results, you can find the weighted-average accumulated expenditures.