5. How much borrowing costs are capitalized to the cost of the constructed building? * FOR ITEM# 5 On Jan 1, 2021, Mayumi Corp. obtained a 12%, Php6,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of Php180,000. The construction was completed on Dec 31, 2021. a. 540,000 b. 480,000 c. 720,000 d. 0

5. How much borrowing costs are capitalized to the cost of the constructed building? * FOR ITEM# 5 On Jan 1, 2021, Mayumi Corp. obtained a 12%, Php6,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of Php180,000. The construction was completed on Dec 31, 2021. a. 540,000 b. 480,000 c. 720,000 d. 0

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 8RE

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On January 1, 20x1, Entity A obtained a 12%, ₱6,000,000 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. How much borrowing costs are capitalized to the cost of the constructed building? 540,000 3. 720,000 480,000 4. 0
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Snowbird Company is constructing a building that qualifies for interest capitalization. It is built between January 1 and December 31, 2019. Snowbird made the following expenditures related to this building: April 1 $396,000 July 1 400,000 September 1 510,000 December 1 120,000 The company borrowed $500,000 at 12% to help finance the project. In addition, Snowbird had outstanding borrowings of $2 million at 8% and $1 million at 9%. Required: Compute the amount of interest capitalized related to the construction of the building. Do not round your interim calculations. Round your final answer to the nearest dollar. Next Level In the current period, the capitalization of interest ; in future period the effect of capitalized interest is to .