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.
B) 8 ÷ 12.
C) 9 ÷ 12.
D) 11 ÷ 12.

Question

Quizplus · Accepted Answer

The fraction represents the portion of the year that the expenditure has had an impact on the construction project. Since the project started on April 1 and ended on December 1, it lasted for 8 months out of the 12-month year, hence 8 ÷ 12.

Construction of a Qualifying Asset Is Started on April 1