On January 1, 2016, Olvert Corp

question 93

Multiple Choice

On January 1, 2016, Olvert Corp. signed a contract to have Bob's Builders construct a distribution center at a cost of $10,000,000. It was estimated that it would take two years to complete the project. Also on January 1, 2017, to finance the construction cost, Tolvin borrowed $10,000,000 payable in five annual installments of $4,000,000 plus interest at the rate of 6%. During 2017, Tolvin made the following construction-related expenditures:

What amount should Tolvin report as capitalized interest at December 31, 2017?

• A) $621,000
• B) $300,000
• C) $207,000
• D) $150,000

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Definitions:

Nice Things

Objects or gestures that are pleasant, enjoyable, or appealing, often used to express affection or appreciation.

Distrust

The feeling of skepticism or doubt towards someone or something's reliability or truthfulness.

Halo Effect

A cognitive bias where an impression created in one area influences opinion in another area.

Attractive

Qualities or features that are pleasing or appealing to the senses, especially aesthetically or in terms of personality.