Use the Following to Answer Questions

question 61

Multiple Choice

Use the following to answer questions
On June 1,2015,the Crocus Company began construction of a new manufacturing plant.The plant was completed on October 31,2016.Expenditures on the project were as follows ($ in millions) :
On July 1,2015,Crocus obtained a $70 million construction loan with a 6% interest rate.The loan was outstanding through the end of October,2016.The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 8%.This note was outstanding during all of 2015 and 2016.The company's fiscal year-end is December 31.
-What is the amount of interest that Crocus should capitalize in 2015,using the specific interest method?

• A)$1.90 million.
• B)$1.95 million.
• C)$2.96 million.
• D)None of these answer choices are correct.

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Definitions:

Tarsals

Tarsals are the seven short bones that make up the ankle and the rear portion of the foot, helping to distribute body weight in standing and walking.

Shallow Depression

A minor or surface indentation or dimple on an object or body part.

Fossa

A depression or sunken area in the bone, usually where muscles or tendons attach.

Bone Marking

Features on bones, such as ridges and bumps, that indicate where muscles, tendons, and ligaments attach.