An entity had the following loans outstanding during 20X1 and 20X2. Specific construction loan, 2,000,000 - 15% General loan, 15,000,000 - 12% The entity began the self-construction of a new building on January 1, 20X1 and the building was completed on December 31, 20X2. The following expenditures were made during 20X1 and 20X2: January 1, 20X1 - 2,000,000; July 1, 20X1 - 4,000,000; November 1, 20X1 - 3,000,000; July 1, 20X2 - 1,000,000. What is the Capitalizable Borrowing cost – 20X2

An entity had the following loans outstanding during 20X1 and 20X2. Specific construction loan, 2,000,000 - 15% General loan, 15,000,000 - 12% The entity began the self-construction of a new building on January 1, 20X1 and the building was completed on December 31, 20X2. The following expenditures were made during 20X1 and 20X2: January 1, 20X1 - 2,000,000; July 1, 20X1 - 4,000,000; November 1, 20X1 - 3,000,000; July 1, 20X2 - 1,000,000. What is the Capitalizable Borrowing cost – 20X2

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

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 18RE

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10. An entity had the following loans outstanding during 20X1 and 20X2.Specific construction loan, 2,000,000 - 15%General loan, 15,000,000 - 12%The entity began the self-construction of a new building on January 1, 20X1 and the building was completed on December 31, 20X2. The following expenditures were made during 20X1 and 20X2: January 1, 20X1 - 2,000,000; July 1, 20X1 - 4,000,000; November 1, 20X1 - 3,000,000; July 1, 20X2 - 1,000,000. What is the cost of the building?
Change Entity had the following borrowing on January 1 of the current year. The borrowings were made for general purposes and the proceeds were partly used to finance the construction of a new building.10% bank loan, 2,800,000 - 280,000 annual interest10% short-term note, 1,600,000 - 160,000 annual interest12% long-term loan, 2,000,000 - 240,000 annual interestThe construction of the building was started on January 1 and was completed on December 31 of the current year. Expenditures on the building were made as follows: January 1 - 400,000; March 31 - 1,000,000; June 30 - 1,200,000; September 30 - 1,000,000; December 31 - 400,000. (Round off the capitalization rate to 3-decimal). What is the average expenditure?
Innuendo Company had the following loans outstanding for the entire year 2021. Specific construction loan – 2,000,000 – 10% General loan – 10,000,000 – 12% The entity began the self-construction of building on January 1, 2021 and the building was completed on December 31, 2021. The following expenditures were made during the current year: January 1 - 1,000,000 July 1 - 4,000,000 November 1 - 3,000,000 Total - 8,000,000 Required: Compute the cost of the new building.
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 for a total construction cost of ₱7,000,000. How much is the historical cost of the newly constructed building? 7,540,000 3. 7,000,000 7,480,000 4. 6,460,000
Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022: January 1, 2021 4,000,000April 1, 2021 5,000,000December 1, 2021 3,000,000March 1, 2022 6,000,000 What amount of interest is capitalized as cost of the new building in 2021? What is the cost of the building to date December 31, 2021? What is the cost of the building on December 31, 2022? What amount of interest expense should be reported for 2022?
Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022: January 1, 2021 4,000,000April 1, 2021 5,000,000December 1, 2021 3,000,000March 1, 2022 6,000,000 1. What is the amount of interest capitalized as ost of the new building? And what is the cost of new building to date dec. 31 2021
Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022: January 1, 2021 4,000,000April 1, 2021 5,000,000December 1, 2021 3,000,000March 1, 2022 6,000,000 What amount of interest expense should be reported for 2022?
On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 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 for total construction costs of ₱7,000,000. How much is the cost of the building on initial recognition? * A. 7,320,000 B. 7,500,000 C. 6,680,000 D. 7,000,000
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) ₱ 1,000,000 10% bank loan (3-year) 8,000,000 Expenditures made on the qualifying asset were as follows: Jan. 1 ₱ 5,000,000 March 1 4,000,000 August 31 3,000,000 December 1 2,000,000 Construction was completed on December 31, 20x1. How much borrowing costs are capitalized to the cost of the constructed qualifying asset? 1,045,000 1,026,667 971,111 920,000 How much is the cost of the qualifying asset on initial recognition? 13,010,000 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 was used to finance the construction of a qualifying asset: Principal 12% bank loan (1.5 years) ₱ 1,000,000 10% bank loan (3-year) 8,000,000 Expenditures made on the qualifying asset were as follows: Jan. 1 ₱ 5,000,000 March 1 4,000,000 August 31 3,000,000 December 1 2,000,000 Construction was completed on December 31, 20x1. How much borrowing costs are capitalized to the cost of the constructed qualifying asset? 1,045,000 c. 1,026,667 971,111 d. 920,000 How much is the cost of the qualifying asset on initial recognition? 13,010,000 c. 14,920,000 15,045,000 d. 14,971,111
Jen Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan outstanding during 2021 and 2022. The entity began the self-construction of a building on January 1, 2021 and was completed on December 31, 2022. The following expenditures were made during 2021 and 2022:January 1, 2021 4,000,000 April 1, 2021 5,000,000 December 1, 2021 3,000,000 March 1, 2022 6,000,000 1) What is the cost of the building on December 31, 2022? A. 18,000,000 B. 20,988,000 C. 19,980,000 D. 20,100,000 2) What amount of interest expense should be reported for 2022? A. 3,000,000 B. 3,300,000 C. 1,212,000 D. 912,000
Rona Co. had 9% P2,000,000 specific construction loan and 12% P15,000,000 general loan outstanding during 2023 and 2024. The entity began the self-construction of a new building on August 1, 2023 and the building was completed on September 30, 2024. Expenditures during 2023 and 2024 were August 1, 2023, P2,000,000; October 1, 2023, P4,000,000; December 1, 2023, P3,000,000; and July 1, 2024, P900,000. 3) What is the cost of the new building on September 30, 2024? A. 9,225,000 B. 9,900,000 C. 10,937,250 D. 10,337,250 4) What is the interest expense for 2024? A. 1,980,000 B. 1,122,750 C. 1,167,750 D. 0