On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of ₱180,000. The construction was completed on December 31, 20x1 for total construction costs of ₱7,000,000. How much is the cost of the building on initial recognition? *   A. 7,320,000   B. 7,500,000   C. 6,680,000   D. 7,000,000

Denger

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2. Early in 2022, Erin Corporation engaged Mikell, Inc. to design and construct a complete modernization of Erin's manufacturing facility. Construction was begun on May 1, 2022 and was completed on December 31, 2022. Erin made the following payments to Mikell, Inc. during 2022: May 1 $3,000,000 September 1 4,400,000 December 1 2,200,000 In order to help finance the construction, Erin issued $1,500,000 of 10-year, 5% bonds payable, issued at par on April 30, 2022, with interest payable annually on April 30. In addition, Erin had a $3,500,000, 6% note payable dated January 1, 2005 and due January 1, 2024, with interest payable annually on January 1 and a $1,000,000, 4% note payable dated July 1, 2009 and due June 30, 2023, with interest payable annually on June 30. Required: a. Calculate the weighted-average accumulated expenditures. b. Calculate avoidable interest. c. Calculate total amount of interest to be capitalized during 2022.

A proprietorship has a calendar fiscal year and acquires a machine on April 1 of the current year. The machine has a cost of $54,000. The proprietor pays a contractor $19,000 to install the machine and pays a non-refundable provincial sales tax of $8,600. The machinery is Class 8 equipment with a CCA rate of 20%. Assuming that the opening UCC for Class 8 assets is $0, what is the maximum CCA that can be deducted for this machine in the current fiscal year? A. $16,320 B. $24,480 O C. $8,160 D. $21,900