How much is the cost of the qualifying asset on initial recognition? * 15,045,000 13,010,000 14,970,900 14,920,000 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 wasused to finance the construction of a qualifying asset:PrincipalP1,000,00012% bank loan (1.5 years)10% bank loan (3-year)P8,000,000Expenditures made on the qualifying asset were as follows:Jan.1P 5,000,0004,000,000March 1August 31December 13,000,0002,000,000Construction was completed on December 31, 20x1..How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

Here interest costs should be capitalized

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 12% bank loan (1.5 years) 10% bank loan (3-year) P1,000,000 P8,000,000 Expenditures made on the qualifying asset were as follows: Jan.1 P5,000,000 March 1 4,000,000 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?

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 12% bank loan (1.5 years) 10% bank loan (3-year) P1,000,000 P8,000,000 Expenditures made on the qualifying asset were as follows: Jan.1 P5,000,000 March 1 4,000,000 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company's general borrowings for the year: 10% loan repayable 20X9 Select one: 8% loan repayable 20Y2 a. £892,500 b. £425,000 C. £541,875 d. £305,625 Em 25 Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £4.5 million on that date to fund construction. On 1 September 20X8 an additional £6 million was withdrawn for the same purpose. 75 Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8.
Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company’s general borrowings for the year: £m 10% loan repayable 20X9 250 8% loan repayable 20Y2 750 Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £45 million on that date to fund construction. On 1 September 20X8 an additional £60 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. Select one: a. £5,000,000 b. £4,250,000 c. £5,418,750 d. £850,000 e. £8,925,000 f. £3,056,250
Entity A invested $18,000 in 10.00% loan notes. The loan interest is paid in arrears. The loan notes are repayable at a premium after 3 years. The effective rate of interest is 12.00%. Entity A intends to collect the contractual cash flows which consist solely of repayments of interest and principal. REQUIRED: (1) Measure the interest revenue recognised in the Statement of Profit or Loss of year 3. (2) Measure the loan notes recognised in the Statement of Financial Position of year 2
Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company’s general borrowings for the year: £m 10% loan repayable 20X9 25 8% loan repayable 20Y2 75 Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £4.5 million on that date to fund construction. On 1 September 20X8 an additional £6 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. a. £850,000 b. £425,000 c. £305,625 d. £892,500 e. £541,875 f. £500,000
Capita had the following bank loans outstanding during the whole of 20X8: $m 9% loan repayable 20X9 15 11% loan repayable 20Y2 24 Capita began construction of a qualifying asset on 1 April 20X8 and withdrew funds of $6 million on that date to fund construction. On 1 August 20X8 an additional $2 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. A $560,000 B $472,500 C $750,000 D $350,00
Using the PVIFA table determine the annual payment on a $600,000, 10 percent, business loan from a commercial bank that is to be amortized over a five-year period
On January 1, 2014, ENERVATE TO WEAKEN Company had the following borrowings made for general purposes and a part of the proceeds was used to finance the construction of a qualifying asset. 12% short-term note-P40,000,000 14% bank loan (3-year)- 72,000,000 16% note payable (5-year)- 88,000,000 The construction of the qualifying asset was started on immediately and completed on June 30, 2015 and expenditures incurred on the qualifying asset were as follows: Jan. 1 P19,200,000 Mar. 31 8,800,000 July 30 14,000,000 March 31 21,600,000 June 30 1,200,000 How much is the cost of the new constructed building?
The following information relates to Samson Engineering as at 30 June 2023: RProfit for the year180 000Drawings50 000Property920 000Long-term borrowings510 000Trade receivables380 000Plant and machinery250 000Trade payables180 000Short-term borrowings260 000Fixtures and fittings90 000Inventories420 000Equity at 1 July 20221 175 000Cash45 000Motor vehicles150 000 RequiredCalculate the following:The total non-current assets The total current assetsThe total assets
On January 1, 20x1, an entity issued an interest bearing note payable of P1,600,000 in exchange for land. The note is due on December 31, 20x3. The effective interest rate is 17% Requirement: Provide all the entries during the term of the note payable.
Carriageways Co had the following bank loans outstanding during the whole of 2023 which form the company’s general borrowings for the year: £m 9% loan repayable 20X9 15 11% loan repayable 20Y2 24 Carriageways Ltd began construction of a qualifying asset on 1 April 2023 and withdrew funds of £6 million on that date to fund the construction. On 1 August 2023 an additional £2 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 2023.
The following transactions pertain to the general borrowings made during 2021 by Jeon Company in connection with the construction of the company’s new warehouse: • 8% bank loan- P2,400,000 • 6% short-term note- P1,600,000 • 8% long-term note- P2,000,000 The construction started on January 1, 2021 and the warehouse was completed on December 31, 2021. Expenditures on the warehouse were as follows: • January 1- P400,000 • March 31- P1,000,000 • June 30- P1,200,000 • September 30- P1,000,000 • December 31- P400,000 How much is the capitalizable borrowing cost of Jeon Company?Required to answer. Single choice.
On Jan. 1, 2020, the entity started the preparation of its buildingconstruction. On the same date, it specifically acquired a loan forthe construction. The entity spent P3,000,000 on Jan. 1, 2020 and P5,000,000 on Mar.31, 2021. The loan has a principal amount of P10,000,000, interest of 5% dueevery Jan. 1, maturity date of Jan. 1, 2023, net proceeds ofP9,732,700, and an effective interest rate of 6%. While not yet paidout for the construction, the amount borrowed was temporarilyinvested. Investment income for the two years totaled P480,000. 5. How much is the total capitalizable cost as of Dec. 31, 2021?