Diva builders spent $770,000 in 2012 on a construction project to build an offic
ID: 2708375 • Letter: D
Question
Diva builders spent $770,000 in 2012 on a construction project to build an office building. Diva also capitalized $65,000 of interest on the project in 2012. Diva financed the construction with 2 loans already outstanding. The first loan is for $10,000,000 at 6.5% and the second is $4,500,000 at 8%. The project was completed on November 30, 2013. Additional expenditures in 2013 were as follows:
31-Jan
135,000
31-Mar
170,000
31-Jul
200,000
30-Sep
220,000
30-Nov
185,000
Determine the cost of the office building at project completion and the capitalized interest for 2013 using the weighted-average debt method.
31-Jan
135,000
31-Mar
170,000
31-Jul
200,000
30-Sep
220,000
30-Nov
185,000
Diva builders spent $770,000 in 2012 on a construction project to build an office building. Diva also capitalized $65,000 of interest on the project in 2012. Diva financed the construction with 2 loans already outstanding. The first loan is for $10,000,000 at 6.5% and the second is $4,500,000 at 8%. The project was completed on November 30, 2013. Additional expenditures in 2013 were as follows: Determine the cost of the office building at project completion and the capitalized interest for 2013 using the weighted-average debt method.Explanation / Answer
cost is $2755000