ugular Company started construction on a building on January 1 of the current year and completed construction on December 31 of the same year. The entity had only two interest-bearing notes outstanding during the year, and both of these notes were outstanding for all 12 months of the year. The following information is available: Average accumulated expenditures 2,500,000 Ending balance in construction in progress before capitalization of interest 3,600,000 6% note incurred specifically for the project 1,500,000 9% long-term note 5,000,000 What is the total cost of the building? a. 3,780,000 b. 3,680,000 c. 3,750,000 d. 3,825,000
ugular Company started construction on a building on January 1 of the current year and completed construction on December 31 of the same year. The entity had only two interest-bearing notes outstanding during the year, and both of these notes were outstanding for all 12 months of the year. The following information is available: Average accumulated expenditures 2,500,000 Ending balance in construction in progress before capitalization of interest 3,600,000 6% note incurred specifically for the project 1,500,000 9% long-term note 5,000,000 What is the total cost of the building? a. 3,780,000 b. 3,680,000 c. 3,750,000 d. 3,825,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jugular Company started construction on a building on January 1 of
the current year and completed construction on December 31 of the same year.
The entity had only two interest-bearing notes outstanding during the year, and both of these notes were outstanding for all 12 months of the year.
The following information is available:
Average accumulated expenditures 2,500,000
Ending balance in construction in progress before
capitalization of interest 3,600,000
6% note incurred specifically for the project 1,500,000
9% long-term note 5,000,000
What is the total cost of the building?
a. 3,780,000
b. 3,680,000
c. 3,750,000
d. 3,825,000
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