HomeworkFall2009solutions 33&amp;34

# HomeworkFall2009solutions 33&amp;34 - HOMEWORK Fall...

This preview shows page 1. Sign up to view the full content.

HOMEWORK - Fall 2009 33. (5 points) On March 1, 2010, Newton Company purchased land for an office site by paying \$540,000 cash. Newton began construction on the office building on March 1. The following additional construction-related expenditures were incurred: Date Expenditures March 1, 2010 \$ 360,000 April 1, 2010 504,000 May 1, 2010 900,000 June 1, 2010 1,440,000 The office was completed and ready for occupancy on July 1. To help pay for construction, \$600,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2010 was a \$300,000, 12%, 6-year note payable dated January 1, 2010. What were Newton’s interest costs for the year? \$600,000 x 9% x 10/12 = \$45,000 \$300,000 x 12% x 12/12 =\$36,000 \$81,000 What were Newton’s weighted-average accumulated construction expenditures? \$900,000 x 4/12 = \$300,000 (\$900, 000 = \$540,000 for the land + \$360,000) \$504,000 x 3/12 = \$126,000 \$900,000 x 2/12 = \$150,000 \$1,440,000 x 1/12 =
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 11/08/2010 for the course ACT ACT3391 taught by Professor R.turpin during the Fall '10 term at Troy.

Ask a homework question - tutors are online