Use the Following Information for Questions 78 Through 80

question 121

Multiple Choice

Use the following information for questions 78 through 80.
On March 1, 2014, Newton Company purchased land for an office site by paying $1,800,000 cash. Newton began construction on the office building on March 1. The following expenditures were incurred for construction: The office was completed and ready for occupancy on July 1. To help pay for construction, and purchase of land $2,400,000 was borrowed on March 1, 2014 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2014 was a $1,000,000, 12%, 6-year note payable dated January 1, 2014.
-The weighted-average accumulated expenditures on the construction project during 2014 were

• A) $1,280,000.
• B) $9,780,000.
• C) $1,040,000.
• D) $2,320,000.

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Definitions:

Mirror Image Rule

A principle in contract law stating that an offer must be accepted exactly without modifications for a contract to be formed.

Parol Evidence Rule

A legal principle stating that oral agreements or statements made prior to or at the time of a written contract cannot contradict the terms of the written contract.

Merchant

An individual or company engaged in the business of selling goods or services.

UCC Article 2

Part of the Uniform Commercial Code that governs the sale of goods in the United States.