Hackleman Company constructed a building from 2008 to 2008-12-31. They made payments of $1,500,000 on 7/1, $3,300,000 on 9/1, and $3,000,000 on 12/31. To calculate the average accumulated expenditures, the payment amounts are multiplied by the number of remaining months before the end of the accounting period and divided by 12. Using this method, the average accumulated expenditures are $1,850,000.
Hackleman Company constructed a building from 2008 to 2008-12-31. They made payments of $1,500,000 on 7/1, $3,300,000 on 9/1, and $3,000,000 on 12/31. To calculate the average accumulated expenditures, the payment amounts are multiplied by the number of remaining months before the end of the accounting period and divided by 12. Using this method, the average accumulated expenditures are $1,850,000.
Hackleman Company constructed a building from 2008 to 2008-12-31. They made payments of $1,500,000 on 7/1, $3,300,000 on 9/1, and $3,000,000 on 12/31. To calculate the average accumulated expenditures, the payment amounts are multiplied by the number of remaining months before the end of the accounting period and divided by 12. Using this method, the average accumulated expenditures are $1,850,000.
building was completed 12/31/08. Hackleman made payments to the construction company of $1,500,000 on 7/1, $3,300,000 on 9/1, and $3,000,000 on 12/31. Average accumulated expenditures were a. $1,575,000. b. $1,850,000. c. $4,800,000. d. $7,800,000. Solving for average accumulated expenditure requires the payment value to be multiplied to the number of remaining months before reaching the accounting period over 12. So, for the 1,500,000 payment, since it was done on 7/1, there would be 6 months (from 7/1 – 12/31); for the 3,300,000 payment, it was done on 9/1 thus the remaining would be 4 months. The payment made on 12/31 has no months left so the multiplier is 0. Adding the 2 values: (1,500,000*6/12)+(3,300,000*4/12) gives the value of 1,850,000.
IAS 21 The Effects of Changes in Foreign Exchange Rates Outlines How To Account For Foreign Currency Transactions and Operations in Financial Statements