On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 300,000 September 1, 2021 $ 450,000 December 31, 2021 $ 450,000 March 31, 2022 $ 450,000 September 30, 2022 $ 300,000 Dreamworld had $5,000,000 in 12% bonds outstanding through both years. Dreamworld's average accumulated expenditures for 2021 was:

Respuesta :

Answer: $450,000

Explanation:

Average expenditure means that the expenditure is based on the months that are left in the year when it was incurred.

Average expenditure for 2021 is:

= January expenditure weight + September expenditure weight + December expenditure weight

=  (300,000 * 12/12 months) + (450,000 * 4 months left/ 12 months) + (450,000 * 0/12 months)

= $450,000

Expenditure is termed as the spending that is done by the household or the consumers on the consumption of the goods and services that are availed in the market by the suppliers of the goods and services.  

The correct answer for Dreamworld's average accumulated expenditures for 2021 is $450,000

Average expenditure for 2021 is:

= January expenditure weight + September expenditure weight + December expenditure weight

=  [tex](300,000 \times \frac{12}{12} \: months) + (450,000 \times \frac{4}{12} \:months) + (450,000 \times \frac{0}{12}\: months)[/tex]

= $450,000

Therefore, Dreamworld's average accumulated expenditures for 2021 is $450,000

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