Answer:
$392,500
Explanation:
January 1,2021 200,000*12/12 $200,000
September 1,2021 $300,00*4/12 $100,000
December 31,2021 $300,000*1/12 $25,000
Borrowing costs to be capitalized $750,000*12%*9/12 $67,500
Average Accumulated expenditure for 2021 $392,500
Please note that borrowing costs incurred on construction loan will also be capitalized as it is specific construction loan..
All the expenditures have been averaged out from the date they are incurred.
