During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for capitalization of interest during 2021 amounted to P 23,600,000. The existingdebt of Colorado are the following:• From Union Bank (specific borrowing), P 3,600,000, 10%• From Land Bank (general borrowing), P 6,000,000, 20%• From Security Bank (general borrowing), P 10,000,000, 18%QUESTION 1:What is the capitalized borrowing costs for the year ended December 31, 2021? [ Select ]QUESTION 2:What is the interest expense for the year ended December 31, 2021? [ Select ][ Select]P 390,000P 750,000P 322,000ZeroNext During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for capitalization of interest during 2021 amounted to P 23,600,000. The existindebt of Colorado are the following:• From Union Bank (specific borrowing), P 3,600,000, 10%• From Land Bank (general borrowing), P 6,000,000, 20%• From Security Bank (general borrowing), P 10,000,000, 18%QUESTION 1:What is the capitalized borrowing costs for the year ended December 31, 2021? [Select ]| Select]P3,750,000P 3,788,000P 3,360,000P 4,110,000QUESTION 2:What is the interest expense for the year ended December 31 , 2021? [ Select ]

Since it is given weighted average expenditure for capitalization, we consider the borrowing are…

During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for capitalization of interest during 2021 amounted to P 23,600,000. The existin debt of Colorado are the following: • From Union Bank (specific borrowing), P 3,600,000, 10% • From Land Bank (general borrowing), P 6,000,000, 20% • From Security Bank (general borrowing), P 10,000,000, 18% QUESTION 1: What is the capitalized borrowing costs for the year ended December 31, 2021? [ Select ] ( Select ] P3,750,000 P3,788,000 P3,360,000 QUESTION 2:

During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for capitalization of interest during 2021 amounted to P 23,600,000. The existin debt of Colorado are the following: • From Union Bank (specific borrowing), P 3,600,000, 10% • From Land Bank (general borrowing), P 6,000,000, 20% • From Security Bank (general borrowing), P 10,000,000, 18% QUESTION 1: What is the capitalized borrowing costs for the year ended December 31, 2021? [ Select ] ( Select ] P3,750,000 P3,788,000 P3,360,000 QUESTION 2:

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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During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for capitalization of interest during 2021 amounted to P 23,600,000. The existing debt of Colorado are the following: From Union Bank (specific borrowing), P 3,600,000, 10% From Land Bank (general borrowing), P 6,000,000, 20% From Security Bank (general borrowing), P 10,000,000, 18% What is the capitalized borrowing costs for the year ended December 31, 2021? A. 4,110,000 B. 3,750,000 C. 3,788,000 D. 3,360,000 What is the interest expense for the year ended December 31, 2021? A. 322,000 B. 390,000 C. 750,000 D. 0
Isko Company had the following general borrowings during 2021 which were used to finance the construction of the entity's new building. Principal 2,800,000 Borrowing Cost 280,000 10% bank loan 10% short-term note 1,600,000 160,000 2,000,000 6,400,000 The construction began on January 1, 2021 and the building was completed on December 31, 2021. In the first phase of the construction, there were idle funds which the entity invested and earned interest 12% long-term loan 240,000 680,000 income of P62,500. Expenditures on the building were made as follows: January 1 March 31 400,000 1,000,000 June 30 1,200,000 September 30 1,000,000 December 31 400,000 What is the amount of capitalizable borrowing cost? (Use 3 decimal places for capitalization rate.)
Sulo Company had the following borrowings during 2021. The borrowing were made for general purposes but the proceeds were used to finance the construction of new building. 12% bank loan – Principal – 3,000,000; Interest – 360,000 14% long term loan – Principal -5,000,000; Interest – 700,000 The construction began on January 1, 2021 and was completed on December 31, 2021. Expenditures on the building were 2,000,000 on January 1, 2,000,000 on June 30 and 1,000,000 in December 31. Required: Compute the cost of the building.
ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan P20,000,000 at12%. The company began a self-construction of a building on January 1, 2020 and was completed on December 31, 2020. The following expenditures were made during 2020: January 1:P1,000,000 July 1: P2,000,000 November 1: P3,000,000 Total: P6,000,000 The cost of constructed building on December 31, 2020 must be
ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan P20,000,000 at12%. The company began a self-construction of a building on January 1, 2020 and was completed on December 31, 2020. The following expenditures were made during 2020: January 1:P1,000,000 July 1: P2,000,000 November 1: P3,000,000 Total: P6,000,000. How much is the cost of constructed building on December 31, 2020? P6,000,000 P6,250,000 P6,280,000 P6,300,000
On January 1, 2023, Cake Company had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset: 12% bank loan (1.5 years)-P1,000,000 10% bank loan (3-year)-P8,000,000 Expenditures made on the qualifying asset were as follows: Jan. 1-P5,000,000 March 1-P4,000,000 August 31-P3,000,000 December 1-P2,000,000 Construction was completed on December 31, 2023. How much is the cost of the qualifying asset on initial recognition?
Use the following information for the next two questions: On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset: Principal P1,000,000 12% bank loan (1.5 years) 10% bank loan (3-year) P8,000,000 Expenditures made on the qualifying asset were as follows: Jan.1 P 5,000,000 4,000,000 March 1 August 31 December 1 3,000,000 2,000,000 Construction was completed on December 31, 20x1. .How much borrowing costs are capitalized to the cost of the constructed qualifying asset?
On January 1, 2020, Karakaraka Co. started construction of a new office building on January 1, 2020, and moved into the finished building on July 1, 2021. Of the P25,000 total cost of the building, P20,000 was incurred in 2020 evenly throughout the year. The entity’s incremental borrowing rate was 12% throughout 2020, and the total amount of interest incurred was P1,020,000. What amount should be reported as capitalized interest on December 31, 2020?
were P2,000,00C on January 1, P1,000,000 on March 31 and The construction began on January 1, 2020 and was completed on December 31, 2020. The expenditures on the construction Problem 25-2 (IFRS) On January 1, 2020, Shangrila Company borrowed P2,000,000 at an interest rate of 12% specifically for the construction of a new building. The actual interest cost on this specific borrowing was P240,000 but interest of P10,000 was earned from the temporary investment of the borrowing proceeds. Shangrila Company also had the following other loans in 2020 which were borrowed for general purposes but the proceeds were used in part for the construction of the building. 'Principal Interest 10% bank loan 3,000,000 5,000,000 300,000 600,000 12% long term loan P3,000,000 on September 30. Required: Compute the cost of the new building.
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.
Use the following information for the next two questions: On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset: 12% bank loan (1.5 years) 10% bank loan (3-year) Principal ℗ 1,000,000 8,000,000 Expenditures made on the qualifying asset were as follows: Jan. 1 P 5,000,000 4,000,000 March 1 August 31 December 1 3,000,000 2,000,000 Construction was completed on December 31, 20x1. 20. How much borrowing costs are capitalized to the cost of the constructed qualifying asset? a. 1,045,000 c. 1,026,667 b. 971,111 d. 920,000 21. How much is the cost of the qualifying asset on initial recognition? a. 13,010,000 c. 14,920,000 b. 15,045,000 d. 14,971,111
Maragondon Company had the following borrowings during 2018. The borrowings were made for general purposes but the proceeds were used in part to finance the construction of a new building: Principal Interest 12% bank loan 10,000,000 1,200,000 15% long-term loan 20,000,000 3,000,000 30,000,000 4,200,000 The construction began on January 1, 2018 and was completed on December 31, 2018. Expenditures on the building were made as follows:January 1 8,000,000June 30 8,000,000December 31 4,000,000 The capitalizable borrowing cost isa. 1,680,000b. 1,400,000c. 4,200,000d. 1,620,000 What is the solution for the option A?