Question

Sheffield Corp. is constructing a building. Construction began in 2020 and the building was completed 12/31/20. Sheffield made payments to the construction company of $3120000 on 7/1, $6468000 on 9/1, and $5870000 on 12/31. Weighted-average accumulated expenditures were
a. $3716000
b. $3177000.
c. $15458000.
d. $9588000

Answer 1

Answer:

Explanation:

Date = July 1 - 21

Expenses = 3,120,000

Weighted average expenses =  3,120,000 * 6/12 = 1,560,000

Accumulated expenses = 1,560,000

Date = Sept 1 - 21

Expenses = 6,468,000

Weighted average expenses =  6,468,000 * 4/12 = 3,716,000

Accumulated expenses = 3,716,000 - 1,560,000 = 2,156,000

Date = Dec 1 - 21

Expenses = 5,870,000

Weighted average expenses =  5,870,000*0/12 = 5,870,000

Accumulated expenses = 5,870,000 - 2,156,000 = 3,716,000

Thus, the weighted-average accumulated expenditures were $3,716,000.