To compute the weighted average accumulated expenditures on Bramble's new building during the capitalization period, we need to consider the payments made to Black Construction and the timing of these payments.
Using the information provided, we can calculate the weighted average accumulated expenditures as follows:
1. Identify the payments made during the capitalization period:
- July 30, 2025: $1,152,000
- January 30, 2026: $1,920,000
- May 30, 2026: $2,048,000
2. Determine the time-weighted factor for each payment:
The capitalization period starts from June 1, 2025, to May 27, 2026, which is a total of 361 days.
- July 30, 2025: 63 days / 361 days = 0.1745
- January 30, 2026: 244 days / 361 days = 0.6765
- May 30, 2026: 360 days / 361 days = 0.9972
3. Calculate the weighted average accumulated expenditures:
- July 30, 2025: $1,152,000 * 0.1745 = $200,724
- January 30, 2026: $1,920,000 * 0.6765 = $1,299,840
- May 30, 2026: $2,048,000 * 0.9972 = $2,042,496
4. Sum up the weighted amounts:
$200,724 + $1,299,840 + $2,042,496 = $3,542,060
Therefore, the weighted average accumulated expenditures on Bramble's new building during the capitalization period amount to $3,542,060.