Question: Outshine Ltd. begins construction of an education center on April 1, 2015 which is completed on July 31, 2016. The expenditures are as follows:
|
April 1, 2015
|
$300,000
|
|
July 31, 2015
|
180,000
|
|
December 1, 2015
|
90,000
|
|
Jan.31, 2016
|
70,000
|
|
June 30, 2016
|
140,000
|
|
total
|
780,000
|
Outshine issues a $500,000 bond payable with an interest rate of 5% to finance the project which is outstanding during the entire construction period. In addition, the following general-purpose debts are outstanding:
7% 10-year bond due 2018 $2,000,000
8% 20-year note due 2020 $3,000,000
1. What is the weighted average accumulated expenditure in 2015?
2. What is the weighted average interest rate on the two general debts?
3. What is the amount of interest to be capitalized in 2015?
4. What is the weighted average accumulated expenditure in 2016?
5. What is the amount of interest to be capitalized in 2016?
6. What is the total cost of the education center?