Balance Corporation borrowed P10,000,000 at 12% to finance in part the construction of a new office building on January 1, 2021 and in part for general purposes. The loan is to be repaid commencing the month following completion of the building.
Q: The following events occurred during the year ended 30 June 2020 for Electrical Limited. On 1 June…
A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…
Q: n January 1, 2020, Christine Company borrowed P30,000,000 at 12% to finance partly the construction…
A: Interest to be capitalised on Decemeber 31, 2020 = 12% x P30000000 =P 3600000 = P3600000
Q: During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated…
A: the amount of interest capitalized for 2020 Construction Loan * Rate of borrowing +…
Q: On January 1, 2021, Stoops Entertainment purchases a building for $550,000, paying $10,000 down and…
A: Lets understand the basics. For recording financial event or transaction occur during a particular…
Q: On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was…
A: The Specific interest method is used to identify borrowings or sections of borrowings that are…
Q: 23. On January 1, 2020, ENERVATE TO WEAKEN Company had the following borrowings made for general…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: During 2022, Romart Company constructed a new building at a cost of P30,000,000. The expenditures…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: On January 1, 2021, the Marjlee Company began construction of an office building to be used as its…
A: The question is related to Borrowing Cost. Weighted Average rate is calculated on long term loan…
Q: BlueFurniture Company started construction of a combination office and warehouse building for its…
A: Depreciation is the amount of expense which is recorded to report the regular wear and tear in the…
Q: Solomon Company constructed its own office building. The company had a 1,000,000 two-year 12% loan…
A: Weighted average borrowing rate = (1500, 000*10%) +(2500, 000*12%) /(1500, 000+2500, 000) = (150,…
Q: r more than a decade since its incorporation, Dawn Company had been renting its office space. The…
A: Solution The borrowing cost related to the qualifying asset shall be capitalized and included in the…
Q: On January 1, 2021, Hamlet Company borrowed P6,000,000 at an annual interest rate of 10% to finance…
A: Carrying amount of the plant on November 30, 2021 = Construction cost + Interest - Interest income
Q: AS 23 On January 1, 2019, Haven Company loaned P24,000,000 from a bank in order to finance…
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: Saleh Furniture Company started construction of a combination office and warehouse building for its…
A: Avoidable Interest: The interest that might be avoided is simply the interest that should not have…
Q: ISKOLAR started constructing a building to be used for producing its goods in January 2021. ISKOLAR…
A: Calculation of the amount of borrowing costs to be capitalised as per PAS23::: Interest Expense of…
Q: At December 31, 2019, Afro Corp. reported P1,750,000 of appropriated retained earnings for the…
A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…
Q: How much borrowing cost shall be capitalized?
A: As per IAS 23 (Borrowing costs ) An entity need to capitalize borrowing costs (Interest and other…
Q: total amount of expense
A: Property taxes for the quarter Annual property taxes/4 Annual property taxes P120,000…
Q: On January 1, 2021, Raffy Company took out a loan of P24,000,000 in order to finance specifically…
A: The borrowing costs are the interest cost for the loans obtained. The borrowing costs are normally…
Q: On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was…
A: As per accounting rule when an asset is under construction then all…
Q: Tamarisk Furniture started construction of a combination office and warehouse building for its own…
A: Borrowing costs are the interest and other expenses incurred by a company when it borrows money.
Q: During 2021, Happy Company constructed asset costing P10,000,000. The weighted average expenditures…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: Stellar Furniture Company started construction of a combination office and warehouse building for…
A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its…
Q: At December 31, 2019, Afro Corp. reported P1.750,000 of appropriated retained earnings for the…
A: Appropriated retained earnings refers to the portion of earing parked aside for specific purposes.…
Q: The following events occurred during the year ended 30 June 2020 for Electrical Limited. On 1 June…
A: 1. Interest payable - $48000 x 12 % x 1/12 = $480 Notes payable - $48000 2. Deposit in advance -…
Q: BlossomFurniture Company started construction of a combination office and warehouse building for its…
A: Given: Estimated cost = $7,000,000 Total cost = $7,280,000 Accumulated expenditures = $5,040,000
Q: LIME Co. decided to construct a building to expand its operations. The entity decided to obtain a…
A: LIME Co. decided to construct building to expand its operations. Entity decided to obtain loan from…
Q: the following payments to ABC Construction company during 2018: January 1…
A: The initial recording of all monetary business transactions in a systematic way is known as journal…
Q: On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its…
A: Date Expenditure x Weight = Average January 1 $600,000 x 12/12 = $600,000 March 31 1,200,000 x…
Q: On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The…
A: Answer: Part 1: PV factor for deferred annuity = PVA factor, n = 6, i = 12% - PVA factor, n = 3, i =…
Q: Avoidable Interest $ Compute the depreciation expense for the year ended December 31,…
A:
Q: Jen Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan…
A: The question is based on the concept of Accounting Standard on Borrowing Cost.
Q: At December 31, 2019, Afro Corp. reported P1,750,000 of appropriated retained earnings for the…
A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…
Q: On January 1, 2021, the Marjlee Company began construction of an office building to be used as…
A: Solution: Weighted average interest rate of all other debt Debt Amount Interest rate Interest…
Q: During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for…
A: Since it is given weighted average expenditure for capitalization, we consider the borrowing are…
Q: The following events occurred during the year ended 30 June 2020 for Electrical Limited. On 1 June…
A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…
Q: apitalization of interest during 2021 amounted to P 23,600,000. The existing debt of Colorado are…
A: SOLUTION- CAPITALIZATION RATE = (TOTAL INTEREST / TOTAL BORROWING ) *100…
Q: Harrisburg Furniture Company started construction of a combination office and warehouse building for…
A: a. Calculate weighted average interest rate: Calculate avoidable interest: Avoidable interest =…
Q: A Corporation began construction work in 2019 for a project with a contract price of P8,000,000. The…
A: >Contract accounting involves complex estimates and calculations.>This is because the contract…
Q: BlueFurniture Company started construction of a combination office and warehouse building for its…
A:
Q: Chung Corp. thought of constructing their own building for P40,000,000 which they plan to start and…
A: Cost capitalization is an important aspect in ascertaining the cost of an asset. It provides a best…
Q: Sulo Company had the following borrowings during 2021. The borrowing were made for general purposes…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its…
A: Calculation of Average Construction Expenditure Date Expenditure Weight Average Jan 1 600,000…
Q: Grouper, Inc. has a fiscal year ending April 30. On May 1, 2020, Grouper borrowed $9,912,000 at 11%…
A:
Q: Capitalized interest on Groupers financial statements?
A:
Q: REQUIRED: For the year ended 31 December 2019 show the following: 1. The Statement of…
A: As per the IFRS 'Borrowing Cost', Borrowing costs incurred to acquire the Qualifying Asset shall be…
Q: On January 1, 2021, Shangrila Company borrowed P2,000,000 at an interest rate of 12% specifically…
A: Borrowing Cost: Borrowing costs are interest and other costs incurred by an entity for borrowing…
Q: The following events occurred during the year ended 30 June 2020 for Electrical Limited. On 1 June…
A: As per your request we are answering from Question number 04 to 06.
Q: On January 1, 2021, the Marjlee Company began construction of an office building to be used as its…
A: Interest Capitalized=Interest on specific construction loan+Interest at Average cost of borrowing
Step by step
Solved in 5 steps
- Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan – 3,000,000 – 10% General loan – 25,000,000 – 12% The entity began the self-construction of a new building January 1, 2021 and the building was completed on June 30, 2022. The following expenditures were made: January 1, 2021 - 4,000,000 April 1, 2021 - 5,000,000 December 1, 2021 - 3,000,000 March 1, 2021 - 6,000,000 Required: Compute the cost of the new building on December 31, 2021 and June 30, 2022. Compute the interest expense for 2021 and 2022.Innuendo Company had the following loans outstanding for the entire year 2021. Specific construction loan – 2,000,000 – 10% General loan – 10,000,000 – 12% The entity began the self-construction of building on January 1, 2021 and the building was completed on December 31, 2021. The following expenditures were made during the current year: January 1 - 1,000,000 July 1 - 4,000,000 November 1 - 3,000,000 Total - 8,000,000 Required: Compute the cost of the new building.On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: B 4 12% bonds Long-term note, 8% Required: Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 1 $600,000 $1,200,000 $800,000 $600.000 $300,000 Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place.) Expenditure Average Date January 1 March 31 June 30 September 30 December 1 Avg. accumulated expenditures 5,000,000 3,000,000 Average accumulated expenditures X X X X X Amount Weight X X IIII|| Interest Rate P Capitalized Interest
- Jen Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022:January 1, 2021 4,000,000 April 1, 2021 5,000,000 December 1, 2021 3,000,000 March 1, 2022 6,000,000 1) What is the cost of the building on December 31, 2022? A. 18,000,000 B. 20,988,000 C. 19,980,000 D. 20,100,000 2) What amount of interest expense should be reported for 2022? A. 3,000,000 B. 3,300,000 C. 1,212,000 D. 912,000Interest During Construction Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: January 1 $258,000 (includes cost of purchasing land of $150,000) May 1 310,000 July 1 450,000 October 31 280,000 In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year. Required: 1. Compute the amount of interest capitalized related to the construction of the building. 24 42,000 x 2. If the expenditures are assumed to have been incurred evenly throughout the year: Compute weighted average accumulated expenditures 654,000 x Compute the amount of interest capitalized on the building 52,320 xInterest During Construction Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: January 1 $258,000 (includes cost of purchasing land of $150,000) May 1 320,000 July 1 450,000 October 31 280,000 In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year. Required: 1. Compute the amount of interest capitalized related to the construction of the building. 2. If the expenditures are assumed to have been incurred evenly throughout the year: Compute weighted average accumulated expenditures Compute the amount of interest capitalized on the building
- Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: January 1 $252,000 (includes cost of purchasing land of $150,000) May 1 310,000 July 1 450,000 October 31 280,000 In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year. Required: Compute the amount of interest capitalized related to the construction of the building. $ If the expenditures are assumed to have been incurred evenly throughout the year:Compute weighted average accumulated expenditures $ Compute the amount of interest capitalized on the building $Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: January 1 $252,000 (includes cost of purchasing land of $150,000) May 1 310,000 July 1 420,000 October 31 276,000 In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was outstanding for the entire year. 1. Compute the amount of interest capitalized related to the construction of the building. 2.If the expenditures are assumed to have been incurred evenly throughout the year:a. Compute weighted average accumulated expenditures b. Compute the amount of interest capitalized on the buildingMarie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022: January 1, 2021 4,000,000April 1, 2021 5,000,000December 1, 2021 3,000,000March 1, 2022 6,000,000 What amount of interest is capitalized as cost of the new building in 2021? What is the cost of the building to date December 31, 2021? What is the cost of the building on December 31, 2022? What amount of interest expense should be reported for 2022?
- Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022: January 1, 2021 4,000,000April 1, 2021 5,000,000December 1, 2021 3,000,000March 1, 2022 6,000,000 What amount of interest expense should be reported for 2022?Answer please Accounting The Great Company started the construction of a building on March 1, 2020 and finished it on June 30, 2021. You have the following information about the expenditures incurred on the construction in 2020: March 1 $120,000 April 30 290,000 October 1 340,000 November 1 275,000 The Great company took out a one-year loan of $500,000 on April 1, 2020. The annual interest rate is 6%. The company’s general borrowings are as follows: Amount Annual interest rate 2-year Note payable, issued on March 1, 2019 $120,000 6% 1-year bank loan taken out on April 1, 2020 210,000 4% 2-year bank loan taken out on October 1, 2018 340,000 3% Required- Assuming IFRS, determine the carrying value of the asset under-construction on December 31, 2020.On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2025. The company borrowed $2,200,000 at 8% on January 1 to help finance the construction in addition to the construction loan, Highlands had the following debt outstanding throughout 2024 $9,000,000, 10% bonds $6,000,000, 8% long-term note Construction expenditures incurred during 2024 were as follows January 1 March 31 June 30 September 30 December 31 Date $ 900,000 1,500,000 1,160,000 Required: Calculate the amount of interest capitalized for 2024 using the specific interest method Note: Do not round the Intermediate calculations, Round your percentage answers to 1 decimal place (l.e. 0.123 should be entere es 12.3%). January 1 March 31 June 30 September 30 December 31 Accumulated expenditure 900,000 700,000 Expenditure $ Average accumulated expenditures S Amount 0 0 X x X X X x X Weight Interest Rate %6 % = = = = = Average S Capitalized…