ABC Company had the following general borrowings during 2011 which were used to finance the construction of the entity's new building. Principal Borrowing Cost 10% Bank loan 2,800,000.00 280,000.00 10% short term loan 1,600,000.00 160,000.00 12% long term loan 2,000,000.00 240,000.00 6,400,000.00 680,000.00 The construction began on January 1, 2011 and the building was completed on December 31, 2011. In the first phase of the construction there were idle funds which the entity invested and earned interest income of P62,500. Expenditures on the building were made as follows: 1-Jan 400,000.00 31-Mar 1,000,000.00 30-Jun 1,200,000.00 30-Sep 1,000,000.00 31-Dec 400,000.00

ABC Company had the following general borrowings during 2011 which were used to finance the construction of the entity's new building. Principal Borrowing Cost 10% Bank loan 2,800,000.00 280,000.00 10% short term loan 1,600,000.00 160,000.00 12% long term loan 2,000,000.00 240,000.00 6,400,000.00 680,000.00 The construction began on January 1, 2011 and the building was completed on December 31, 2011. In the first phase of the construction there were idle funds which the entity invested and earned interest income of P62,500. Expenditures on the building were made as follows: 1-Jan 400,000.00 31-Mar 1,000,000.00 30-Jun 1,200,000.00 30-Sep 1,000,000.00 31-Dec 400,000.00

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 18E

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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?
On January 1, 2017, Sheena Company borrowed 2,800,000 at an interest rate of 12% specifically for the construction of a new building.The actual interest cost on this specific borrowing was 336,000 but interest of 14,000 was earned from the temporary investment of the borrowing proceeds.Sheena company also had the following other loans in 2017 for general purposes but the proceeds were used in part for the construction of the building.Principal Interest10% bank loan 4,200,000 420,00012% long term loan 7,000,000 840,000The construction began on January 1, 2017 and was completed on December 31, 2017. The expenditures on the construction were 2,800,000 on Jan. 1, 1,400,000 on March 31 and 4,200,000 on Sept.30.Required: Compute the cost of the new building.
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