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What Is the Amount of Interest That Crocus Should Capitalize

Question 58

Multiple Choice

What is the amount of interest that Crocus should capitalize in 2009, using the specific interest method (rounded to the nearest thousand dollars) ?


A) $7,248,000 (rounded)
B) $7,283,000 (rounded)
C) $8,740,000 (rounded)
D) None of these is correct.Of the average accumulated expenditures ($124.25 million from question 100) , $70 million was financed at 6% for 10 months in 2009, and the remainder of $54.25 million was financed at 8% for that period.The total interest cost was: ($70 million .06 10/12) + ($54.25 million .08 10/12) = $7, 117,000 (rounded)

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