On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021 Expenditures on the project were as follows (S in milons) July 1, 2020 October 1, 2020 78 46 February 1, 2021 April 1, 2021 September 1, 2021 54 33 32 October 1, 2021 18 On July 1, 2020, Crocus obtained a $94 million construction loan with a 8% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest bearing debt was a long term note for $100 million with an interest rate of 10% This note was outstanding during all of 2020 and 2021. The company's fiscal year end is December 31t What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021 Expenditures on the project were as follows (S in milons) July 1, 2020 October 1, 2020 78 46 February 1, 2021 April 1, 2021 September 1, 2021 54 33 32 October 1, 2021 18 On July 1, 2020, Crocus obtained a $94 million construction loan with a 8% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest bearing debt was a long term note for $100 million with an interest rate of 10% This note was outstanding during all of 2020 and 2021. The company's fiscal year end is December 31t What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 40P
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On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021.
Expenditures on the project were as follows (S in millions)
July 1, 202o
78
October 1, 2020
46
February 1, 2021
April 1, 2021
September 1, 2021
54
33
32
October 1, 2021
18
On July 1, 2020, Crocus obtained a $94 million construction loạn with a 8% interest rate. The loan was outstanding through the end of
October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 10%. This note
was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.
What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
was uusiariuny uumy an UI ZUZU au 2UZI. Ie LUmpanys Iscai yeai-eu IS DecemIDer 31.
What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
Multiple Choice
None of these answer choices are correct.
$3.99 million.
$4.04 million.
$5.05 million.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3eeefaa8-5b0d-463d-a0b3-c227b719b7b6%2F1f0b05fa-5509-4b55-bc9c-48f2b4fec00c%2Fq0poga_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exit
On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021.
Expenditures on the project were as follows (S in millions)
July 1, 202o
78
October 1, 2020
46
February 1, 2021
April 1, 2021
September 1, 2021
54
33
32
October 1, 2021
18
On July 1, 2020, Crocus obtained a $94 million construction loạn with a 8% interest rate. The loan was outstanding through the end of
October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 10%. This note
was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.
What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
was uusiariuny uumy an UI ZUZU au 2UZI. Ie LUmpanys Iscai yeai-eu IS DecemIDer 31.
What is the amount of interest that Crocus should capitalize in 2020, using the specific interest method?
Multiple Choice
None of these answer choices are correct.
$3.99 million.
$4.04 million.
$5.05 million.
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