During the year ended 31 December 20X1, Bougs Co built an extension to its head office. Associated costs are as follows: Sm 20 Land acquisition Fees for environmental certifications and building permits X3 Architect and engineer fees X4 Construction material and labour costs X5 At 30 September 20X1, this head office extension became available for use. At that date, the total borrowing costs incurred on a loan which was used specifically to finance this head office extension amounted to $1.6 million. Since construction costs are gradually eliminated according to the construction progress, there is a temporary income from the above loan of $0.3 million during the construction period.

During the year ended 31 December 20X1, Bougs Co built an extension to its head office. Associated costs are as follows: Sm 20 Land acquisition Fees for environmental certifications and building permits X3 Architect and engineer fees X4 Construction material and labour costs X5 At 30 September 20X1, this head office extension became available for use. At that date, the total borrowing costs incurred on a loan which was used specifically to finance this head office extension amounted to $1.6 million. Since construction costs are gradually eliminated according to the construction progress, there is a temporary income from the above loan of $0.3 million during the construction period.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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