Explanation The expenditure was incurred at different points of time during the year. Though the total expense was $6,000,000 the actual weighted-average accumulated expenditure would be different. The weighted-average amount is arrived at by multiplying the capitalization period with the amount. For example, on March 1, the company incurred $1,800,000. The capitalization period is March 1 to December 31(10 months). The factor used is 10/12. Now the weight average cost is $1,500,000. Similarly the factors used for the second and third expenditures are 7/12 and 0, respectively. The amounts obtained after finding the products are added together to arrive at the average expenditure. Particulars Amount ($) Amount ($) Amount ($) Expenditures

17th Edition

ISBN: 9781119503682

Author: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

Publisher: WILEY

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Question

Chapter 10, Problem 2BE

To determine

Weighted-Average Accumulated Expenditure: A process of assigning weights to the expenses related to the construction considering the time and the interest cost is termed as weighted average accumulated expenditure. This method is used to compute the avoidable interest.

To determine weighted-average accumulated expenditures for interest capitalization purposes.

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Chapter 10 Solutions

Intermediate Accounting, 17th Edition

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - Prob. 6Q Ch. 10 - 7. Burke Company has purchased two tracts of land....Ch. 10 - Prob. 8Q Ch. 10 - Prob. 9Q Ch. 10 - Prob. 10Q Ch. 10 - Prob. 11Q

Ch. 10 - Prob. 12Q Ch. 10 - Prob. 13Q Ch. 10 - Prob. 14Q Ch. 10 - Prob. 15Q Ch. 10 - Prob. 16Q Ch. 10 - Prob. 18Q Ch. 10 - Prob. 19Q Ch. 10 - Prob. 20Q Ch. 10 - Prob. 21Q Ch. 10 - Prob. 22Q Ch. 10 - Prob. 23Q Ch. 10 - BE10-1 (L01) Previn Brothers Inc. purchased land...Ch. 10 - Prob. 2BE Ch. 10 - Prob. 3BE Ch. 10 - Prob. 4BE Ch. 10 - Prob. 5BE Ch. 10 - Prob. 6BE Ch. 10 - Prob. 7BE Ch. 10 - Prob. 8BE Ch. 10 - Prob. 9BE Ch. 10 - Prob. 10BE Ch. 10 - BE10-11 (L04) Cheng Company traded a used truck...Ch. 10 - Prob. 12BE Ch. 10 - Prob. 13BE Ch. 10 - Prob. 1E Ch. 10 - Prob. 2E Ch. 10 - Prob. 4E Ch. 10 - Prob. 5E Ch. 10 - Prob. 6E Ch. 10 - Prob. 11E Ch. 10 - Prob. 12E Ch. 10 - Prob. 13E Ch. 10 - Prob. 16E Ch. 10 - Prob. 17E Ch. 10 - E10-18 (L04) (Nonmonetary Exchange) Cannondale...Ch. 10 - Prob. 19E Ch. 10 - Prob. 20E Ch. 10 - E10-21 (L05) (Analysis of Subsequent Expenditures)...Ch. 10 - Prob. 23E Ch. 10 - Prob. 8P Ch. 10 - Prob. 9P Ch. 10 - Prob. 10P Ch. 10 - Prob. 1CA Ch. 10 - CA10-4 (Nonmonetary Exchanges) You have two...Ch. 10 - Prob. 5CA Ch. 10 - Prob. 6CA Ch. 10 - Prob. 1UJ Ch. 10 - Prob. 2UJ Ch. 10 - Prob. 1CE Ch. 10 - Prob. 2CE Ch. 10 - Prob. 3CE Ch. 10 - Prob. 4CE Ch. 10 - Codification Research Case Your client is in the...

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