Provide this question solution general accounting On January 1, 2014, Oksana Baiul, Inc. signed a fixed-price contract tohave Builder Associates construct a major plant facility at a costof $4,460,000. It was estimated that it would take 3 years to complete theproject. Also on January 1, 2014, to finance the construction cost, OksanaBaiul borrowed $4,460,000 payable in 10 annual installmentsof $446,000, plus interest at the rate of 10%. During 2014, Oksana Baiulmade deposit and progress payments totaling $1,672,500 under thecontract; the weighted-average amount of accumulated expenditureswas $891,999 for the year. The excess borrowed funds were invested inshort-term securities, from which Oksana Baiul realized investmentincome of $254,000.What amount should Oksana Baiul report as capitalized interest atDecember 31, 2014?

Step 1: Calculate Avoidable Interest• Formula: Avoidable Interest = Weighted-Average Accumulated…

Answered: On January 1, 2014, Oksana Baiul, Inc.…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 18PC

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