ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 118

c. When excess borrowed funds not immediately needed for
construction are temporarily invested, any interest earned
should be offset against interest cost incurred when
determining the amount of interest cost to be capitalized.

d. The minimum amount of interest to be capitalized is
determined by multiplying a weighted average interest rate by
the amount of average accumulated expenditures on
qualifying assets during the period.

38. Construction of a qualifying asset is started on April 1
and finished on December 1. The fraction used to multiply an
expenditure made on April 1 to find weighted-average
accumulated expenditures is

a. 8/8.