Calculate the qualifying building expenditure. Select one:
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A company in the manufacturing sector prepares its account to 31.12 annually. In July 2019, the company completed the construction of its own factory as follows:
Land - RM580,000
Legal fees for an agreement to purchase land - RM11,000
Legal fees for an agreement with the building contractor - RM10,000
Consultant's fees and building plan - RM80,000
Stamp duty for the purchase of land - RM9,000
Construction cost - RM1,510,000
Required: Calculate the qualifying building expenditure.
Select one:
A. RM2,200,000
B. RM1,620,000
C. RM1,590,000
D. RM1,600,000
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Solved in 2 steps
- JustKitchens Inc. provides services to restaurants and hotels. The company supplies paper products, tableware, cookware, restaurant and kitchen equipment, and cleaning supplies. On January 2, 2019, Just-Kitchens enters into a contract with a local restaurant chain to provide its services for 3 years at a cost of 10,000 per year. The restaurant chain pays the total contract fee on January 2, 2019. JustKitchenss stand-alone selling price is also 10,000 per year. After 2 years, the restaurant asks to modify the contract. On January 2, 2021, the companies agree to reduce the fee for the third year to 9,000 in exchange for extending the contract for 2 additional years at a fee of 11,000 per year. This modification is agreed to by both parties, and on that date the restaurant chain pays for the additional 2 years of service. The 11,000 fee for the additional years is the same as JustKitchenss stand-alone price. Required: 1. How should JustKitchens account for the contract modification? 2. Prepare the journal entry that JustKitchens would make over the life of the contract.A company in the manufacturing sector prepares its account to 31.12 annually. In July 2020, the company completed the construction of its own factory as follows: Land-RM580.000 Legal fees for an agreement to purchase land- RM11.000 Legal fees for an agreement with the building contractor - RM10,000 Consultant's fees and building plan RM80,000 Stamp duty for the purchase of land - RM9.000 Construction cost RM1.510,000 Required: Calculate the qualifying building expenditure.A. Jamal Textile Enterprise is a textile manufacturer operating in Selangor. The company was incorporated on 1June 2019 and closes its account annually on 31 December. All machinery purchased was imported from Taiwan and it was delivered on 1January2020, and the business commenced officially on 1February 2020. The following expenditure was incurred: (i) Purchased machinery that cost RM1,000,000 on 1June 2020 and paid deposit RM100,000 on the day of purchase, while the remaining RM900,000 was paid on 1November 2020. (ii) Purchased forklift on hire purchase term on 1January 2020. The total cost of the forklift is RM125,000, and Jamal Textile paid down payment of RM5,000. The total installment payment was RM48,000, excluding an interest amounting RM9,580. (iii) Purchased a new car (Proton X50) on 30December 2020 for the General Manager of the company costing RM120,000 . (iv) Purchased a computer with printer on 1April 2019 for RM5,500. This computer specification however was found to be…
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- Gidi professional institute is constructing a tuition center at Aboabo that will take about 18 months to complete. The company commenced construction on 2 January, 2018. The following payments were made during the year: 31 January GH¢ 40,000,000 1 March GH¢90,000,000 30 June GH¢20,000,00031 October GH¢40,000,00030 November GH¢50,000,000The first payment on 31 January was funded from the company’s pool of debts. However, the company succeeded in raising Medium-Term Loan Notes for an amount of GH¢160,000,000 on 31 March 2018 at a simple interest rate of 9 percent per year, calculated and payable monthly in arrears.These funds were specifically used for the construction. Excess funds were temporarily invested at 6 percent monthly in arrears and payable in cash. The pool of debts was again used for a GH¢40,000,000 payment on 30 November 2018 which could not be funded from the Medium-Term Loan Notes. The construction project was temporarily halted for three weeks in May 2018 when…On January 1, 2018, Sansa Construction entered into a contract amounting to P10,000,000 to construct a building. The engineers of the company estimated that on December 31, 2018, the building was 75% completed. If the expected gross profit rate from the contract is 15%, what is the reportable income of the company in 2018 under the percentage of completion method? a. P1,125,000 b. P1,500,000 c. P7,500,000 d. P10,000,000 e. Answer not givenFor more than a decade since its incorporation, Asahi Company had been renting its office space. The Company President thought of constructing their own building for P40,000,000 which they plan to start and finish until December 31, 2021. Asahi made the following payments, based on the construction contract, during 2021.· January 31- P5,000,000· February 28- P8,000,000· July 1- P15,000,000· August 31- P10,000,000· November 30- P2,000,000Asahi secured a 10%, 4-year noted dated January 1, 2021, specifically intended for the construction. The amount was P20,000,000.Also, the entity had other debts outstanding as follows:· 8%, 6-year note dated December 31, 2019- P18,000,000· 12%, 7-year noted dated December 31, 2018 - P22,000,000 What is the total cost of the building constructed?
- For more than a decade since its incorporation, Feb-Ibig Company had been renting its office space. The Company President thought of constructing their own building for P40,000,000 which they plan to start and finish until December 31, 2021. Feb-Ibig made the following payments, based on the construction contract, during 2021.· January 31- P5,000,000· February 28- P8,000,000· July 1- P15,000,000· August 31- P10,000,000· November 30- P2,000,000Feb-Ibig secured a 10%, 4-year noted dated January 1, 2021, specifically intended for the construction. The amount was P20,000,000.Also, the entity had other debts outstanding as follows:· 8%, 6-year note dated December 31, 2019- P18,000,000· 12%, 7-year noted dated December 31, 2018 - P22,000,000 What is the total cost of the building constructed?On January 1, 2021, Gemini Company contracted with a contractor to construct a building for P20,000,000. The entity is required to make five payments in 2021 with the last payment scheduled on the date of completion. The building was completed on December 31, 2021. The entity made the following payments during 2021: January 1 - 2,000,000 March 31 - 4,000,000 June 30 - 6,100,000 September 30 - 4,400,000 December 31 - 3,500,000 The entity had the following debt outstanding on December 31, 2021: 12% 4-year note dated January 1, 2021, with interest compounded quarterly, both principal and interest due December 31, 2024, relating specifically to the building project. The future value of 1 at 3% for 4 periods is 1.1255 - 8,500,000 10% 10-year note dated December 31, 2020 with simple interest payable annually on December 31 - 6,000,000 12%…In May 2021, Cherry Company relocated an employee from the Manila head office to a branch in Zamboanga City. At the end of the reporting period on June 30, 2021, the costs are estimated at P350,000 analyzed as follows:Cost for shipping goods P 30,000Airfare 10,000Temporary accommodation cost for July and August 80,000Temporary accommodation cost for May and June 90,000Reimbursement for lease break cost paid in July (lease was terminated in May) 20,000Reimbursement for cost of living increases for theperiod May 1, 2021 to May 1, 2022 120,000 1. What amount should be recognized as provision for relocation costs on June 30, 2021?
