Answer:
total capitalized interests = $118,300
Explanation:
Weighted average expenditures:
January 1 = $660,000 x 12/12 = $660,000
March 31 = $760,000 x 9/12 = $570,000
June 30 = $560,000 x 6/12 = $280,000
October 30 = $1,080,000 x 2/12 = $180,000
total weighted expenditures = $1,690,000
weighted interest rate:
$2,000,000 x 9% = $180,000
$4,000,000 x 6% = $240,000
total = $420,000 / $6,000,000 = 7%
capitalized interest:
$1,020,000 x 7% = $71,400
($1,690,000 - $1,020,000) x 8.8% = $46,900
total capitalized interests = $118,300
