Answer:
The correct answer is $60,000.
Explanation:
According to the scenario, the given data are as follows:
Expenditure for Jan.1 = $334,000
Time period ( Jan.1 - Dec.31 ) = 12 months
So, average expenditure = $334,000
Similarly, Expenditure for Sep.1 = $498,000
Time period ( Sep.1 - Dec.31 ) = 4 months
So, average expenditure = $498,000 × 4÷12 = $166,000
Now, Expenditure for Dec.31 = $498,000
Time period ( Dec.31 - Dec.31 ) = 0 months
So, average expenditure = $498,000 × 0÷ 12 = 0
So, capitalized interest = ( average expenditure Jan.1 + average expenditure Sep.1 + average expenditure Dec.31) × 12%
= ($334,000 + $166,000 + $0) × 12%
= $500,000 × 12%
= $60,000
