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question 97

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Use the following information to answer questions
Arlington Company is constructing a building.Construction began on January 1 and was completed on December 31.Expenditures were $2,400,000 on March 1, $1,980,000 on June 1, and $3,000,000 on December 31.Arlington Company borrowed $1,200,000 on January 1 on a 5-year, 12% note to help finance construction of the building.In addition, the company had outstanding all year a 10%, 3-year, $2,400,000 note payable and an 11%, 4-year, $4,500,000 note payable.
-4.During 2011, Churchill Inc.constructed assets costing £4,200,000.The weighted-average accumulated expenditures on these assets during the year was £2,600,000.Churchill took out a construction loan of £4,000,000 was borrowed at 7% on January 1, 2011, and funds not needed for construction were temporarily invested in short-term securities, yielding £30,000 in interest revenue.Other than the construction loan, the only other debt outstanding during the year was a £2,000,000, 5-year, 9% note payable dated January 1, 2007.What is the amount of interest that should be capitalized by Churchill during 2011?

Definitions:

Third-party Complaint

A legal document filed in a lawsuit by a defendant who believes that a third party (not currently involved in the lawsuit) is partially or fully responsible for the claim filed by the plaintiff.

Counterclaim

A claim made by a defendant in a civil lawsuit against the plaintiff, essentially acting as a counter-lawsuit within the same proceeding.

Electronically Stored Information

Information created, stored, or utilized in digital form that can be significant in legal investigations or litigation.

Electronic Data Interchange

The computer-to-computer exchange of business documents in a standard electronic format between business partners.