Calculate the amount of interest capitalized for the year, Cost Accounting

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A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $550,000; March 31, $650,000; June 30, $450,000; October 30, $750,000. To help finance construction, the company arranged a 8% construction loan on January 1 for $800,000. The company's other borrowings, outstanding for the whole year, consisted of a $4 million loan and a $6 million note with interest rates of 13% and 10%, respectively.

Assuming the company uses the weighted-average method, calculate the amount of interest capitalized for the year. (Round intermediate calculations to 2 decimal places. Enter your answer in whole dollars.)

 


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