Company X is a manufacturing firm with total liabilities of Php3,000,000. During the year, it borrowed funds from the bank to purchase machinery. How should it account for the specific borrowing costs related to the loan? Expensed since Company X is an SME Capitalized since the borrowing is for a qualifying asset Capitalized whether or not Company X is an SME Expensed whether or not Company X is an SME

Company X is a manufacturing firm with total liabilities of Php3,000,000. During the year, it borrowed funds from the bank to purchase machinery. How should it account for the specific borrowing costs related to the loan? Expensed since Company X is an SME Capitalized since the borrowing is for a qualifying asset Capitalized whether or not Company X is an SME Expensed whether or not Company X is an SME

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 2EA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...

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Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for extraordinary repairs If all transactions were recorded properly, what amount did Jada capitalize for the year, and what amount did Jada expense for the year?
OMG is in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the companyspent $2,000,000 to install solar panels for electricity in the building. The building was sold for $28,500,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,500,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for $10 million. d. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021.The company is entitled to an Annual Exemption of $500,000. Capital losses as of 1 January 2021 were $1,500,000. Calculate the capital gains tax in 2021, assuming a capital gains tax of 15%. Part CJohn Peter is aware that there is no Capital Gains tax in Jamaica.…
Agnieszka Ltd borrowed £15,000,000 from a bank and used it to buy a warehouse. Which ONE of the following is now an asset in the accounts of Agnieszka Ltd? A. The rent received by subletting part of the warehouse. B. The warehouse. C. The £15 million. D. The interest paid by Agata Ltd on the loan.
Agnieszka Ltd borrowed £15,000,000. from a bank and used it to buy a warehouse. Which of the following is now an asset in the accounts od Agnieszka Ltd? a. the rent received by subletting part od the warehouse b. The warehouse C. The £15 million d. The interest paid by Agnieszka Ltd on the loan
ISKOLAR started constructing a building to be used for producing its goods in March 31, 2021. On January 1, 2021, ISKOLAR borrowed a loan to specifically finance the construction. The interest for the year amounted to P150,000, the Company also earned interest income of P30,000 for the year from its temporary placement of the proceeds from the specific borrowing. According to PAS23, how much borrowing cost should be capitalized by ISKOLAR in 2021?
OMG is in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2,000,000 to install solar panels for electricity in the building. The building was sold for $28,500,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,500,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for $10 million. d. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021. The company is entitled to an Annual Exemption of $500,000. Capital losses as of 1 January 2021 were $1,500,000. Calculate the capital gains tax in 2021, assuming a capital gains tax of 15%.
ISKOLAR started constructing a building to be used for producing its goods in January 2021. ISKOLAR incurred interest of P100,000 from its borrowings to finance the construction. In 2021, the Company also earned interest income of P20,000 and dividend income of P30,000 from its temporary placement of the proceeds from the specific borrowing. According to PAS23, how much borrowing cost should be capitalized by ISKOLAR in 2021? please answer accurately
PTI Inc., located in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2, 800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1 million. d. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021.The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January 2021 was $3,500,000. Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%.
2. On January 1 of the current year, Positive Entity borrowed P1,600,000 at an interest of 10% specifically for the construction of a new building. The actual borrowing cost on this loan is P160,000 but the interest of P20,000 was earned from the temporary investment of the proceeds prior to their disbursement. The entity also had the following other loans in the current year which were borrowed for general purpose, but the proceeds were used in part for the construction of the building.10% short-term note, 1,200,000 - 60,00012% long-term note, 1,600,000 - 192,000The construction of the building started on January 1 and was completed on December 31 of the current year. Expenditures on the construction were made as follows: January- 500,000; April 1 - 1,000,000; May 1 - 1,000,000; September 1 - 1,000,000; December 31 - 500,000. What is the cost of the new building?
Wakanda Company borrowed P4,000,000 on a 10% note payable to finance a new warehouse which the entity is constructing for own use.The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building.At the end of the current year, average accumulated expenditures on the new warehouse totaled P4,750,000. What amount of interest should be capitalized? A. P400,000 B. P475,000 C. P490,000 D. P522,500
OKWU had the following loans in place at the beginning and end of 2011: description 1st January 2011 bank loan 6% p.a 200,000 bank loan, 8% p.a 130,000 debenture stock 55% p.a 50,000 The bank loans were taken for no specific purpose and OKWU used them to finance general spending and the construction of a new machinery. OKWU used $220 000 for the construction of the machinery in 2011. Required: a. What borrowing cost should be capitalized for the new machinery in 2011? b. Determine the cost of the machinery that will be shown in the statement of financial position
Romantic Company owns a fleet of motor vehicles. In 2020, one of the cars which was acquired at a cost of Php. 1,400,000 was allowed as service vehicle by one of its officials. During the year, its book value amounted to Php. 1,150,000. How much was the FBT due thereon? * A. Php. 75,385.00 B. Php. 18,823.00 C. Php. 17,767.00 D. Php. 88,235.00 Based on the data in no. 7 above, suppose Romantic Company is just leasing the car that is being used partly for personal and for business purposes and is paying an annual rental of Php. 120,000. The annual fringe benefit tax is