FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
1-year bank loan taken out on April 1, 2020
$120,000
210,000
6%
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.
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Transcribed Image Text: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 1-year bank loan taken out on April 1, 2020 $120,000 210,000 6% 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.
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