On january 2 2012 dessin ltd began construction of a new, Ask an Expert

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On January 2, 2012, Dessin Ltd began construction of a new citrus processing plant. The automated plant was finished and ready for use on December 31, 2012. Expenditures for the construction were as follows: January 2, 2012 $150,000 March 1, 2012 700,000 September 1, 2012 500,000 December 1, 2012 180,000 December 31, 2012 200,000 Dessin Ltd borrowed $500,000 on a construction loan at 10% interest on January 2, 2012. This loan was outstanding during the construction period. The company also had $3,500,000 in 8% bonds outstanding and a 5-year loan of 1,200,000 at 11% outstanding in 2012 and 2013.

a) What were the weighted-average accumulated expenditures for 2012?

b) What is the weighted-average interest rate used for interest capitalization purposes in 2012?

c) What is the total amount of the interest capitalized for 2012?

d) What is the actual interest for the company in 2012?

e) What is the total amount of the interest capitalized for 2012? f) What is the total amount of the interest expensed for 2012? Show your computations.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92828836

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