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?

Q: On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The…

A: Step 1: 1. Compute the amount at which the cost of the building should be recorded as follows:

Q: Early in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand…

A:

Q: Petty Corp, a calendar year-end company, began construction of a bullding on April 1, 2020. On this…

A: The interest amount is to be capitalized on qualifying assets. The loan amount specifically for the…

Q: n January 1, 2020, Christine Company borrowed P30,000,000 at 12% to finance partly the construction…

A: Interest to be capitalised on Decemeber 31, 2020 = 12% x P30000000  =P 3600000  = P3600000

Q: During 2020, Israel Company constructed asset costing P4,215,000. The weighted average accumulated…

A: Calculation of capitalization rate for general borrowing :                  Loan / Note Payable…

Q: LIME Co. decided to construct a building to expand its operations. The entity decided to obtain a…

A: As per IAS 23 (Borrowing costs )  An entity need to capitalize borrowing costs (Interest and other…

Q: On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was…

A: The Specific interest method is used to identify borrowings or sections of borrowings that are…

Q: On January 1, 2021, the Marjlee Company began construction of an office building to be used as its…

A: The question is related to Borrowing Cost. Weighted Average rate is calculated on long term loan…

Q: Likes Company started construction of a low-rise building for its own use on January 1, 2021.   Upon…

A: Capitalized interest cost = Interest on P10,000,000 @12% + Interest on P600,000 @ 15% - Interest…

Q: How much should be the capital balance of Mr. Wa Is on December 31, 2020, under the cash basis of…

A: Given Information: Initial Investment = P400,000 Service to customers during 2020 = P 800,000 Amount…

Q: ISKOLAR started constructing a building to be used for producing its goods in January 2021. ISKOLAR…

A: As per PAS23, the interest cost on specific borrowing is capitalized with the cost of the assets…

Q: ) On July 31, 2020, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose…

A: a.    Calculate weighted-average accumulated expenditures, avoidable interest, and total interest…

Q: On July 31, 202O, Teal Company engaged Minsk Tooling Company to construct a special-purpose piece of…

A: The question is based on the concept of Financial Accounting.

Q: Prob dapted) During 2020, Elijah Company constructed a new building at cost of P30,000,000. The…

A: Cost of new building  = P30000000 Weighted  average  expenses = P30000000/2 =P15000000

Q: SKOLAR started constructing a building to be used for producing its goods in January 2021. ISKOLAR…

A: solution concept as per the provision of PAS 23 borrowing cost , borrowing cost incurred for the…

Q: The Great Company started the construction of a building on March 1, 2020 and finished it on June…

A: Carrying value is the value of a physical asset at the end of a particular year after the adjustment…

Q: ISKOLAR started constructing a building to be used for producing its goods in January 2021. ISKOLAR…

A: Calculation of the amount of borrowing costs to be capitalised as per PAS23:::  Interest Expense  of…

Q: Cemex Co. began work on a P280 million contract in 2019 to construct an office building. During…

A: Percentage Completion Method: When using the percentage of completion approach, the revenues and…

Q: At December 31, 2019, Afro Corp. reported P1,750,000 of appropriated retained earnings for the…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: On July 31, 2020, Ivanhoe Company engaged Minsk Tooling Company to construct a special-purpose piece…

A: SOLUTION- ACCUMULATED DEPRECIATION  IS THE TOTAL AMOUNT AN ASSET HAS BEEN DEPRECIATED UP UNTIL A…

Q: In January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new…

A: Machineries are the most widely utilized fixed asset in industrial businesses. The acquisition cost…

Q: intermediate accounting

A: The unpaid balance of interest is added to the principal amount of loan, this is called interest…

Q: how much borrowing cost should be capitalized by ISKOLAR in 2021?

A: Borrowing cost can be defined as interest and other costs incurred by an enterprise in relation to…

Q: On January 1, 2021, Raffy Company took out a loan of P24,000,000 in order to finance specifically…

A: The borrowing costs are the interest cost for the loans obtained. The borrowing costs are normally…

Q: ISKOLAR started constructing a building to be used for producing its goods in March 31, 2021. On…

A: SOLUTION- BORROWING COST THAT ARE DIRECTLY ATTRIBUTABLE TO THE ACQUISITION , CONSTRUCTION OR…

Q: On January 1, 2021

A:

Q: On January 1, 2020, Karakaraka Co. started construction of a new office building on January 1, 2020,…

A: Borrowed funds used for building=P20,0002=P10,000

Q: Balance Corporation borrowed P10,000,000 at 12% to finance in part the construction of a new office…

A: Loan Amount = 10,000,000 Expenditure incurred = 8,000,000 Average Expenditure = 8,000,000/2 =…

Q: Assuming IFRS, determine the carrying value of the asset under-construction on December 31, 2020.

A: Borrowing Cost Borrowing cost is the cost of interest and other financing cost that will be…

Q: Assume that a company that incorporated (just started business) on February 25, 2017, and purchased…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: kit Company borrows $6 million at 12% on January 1, 2019, specifically for the purpose of financing…

A: Given as,

Q: On January 1, 2020, Katrina Company obtained a loan of P4,000,000 at an interest rate of 10%…

A: Borrowing cost which are related to the funds used for the qualifying asset till completion, must…

Q: Early in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand…

A:

Q: At December 31, 2019, Afro Corp. reported P1,750,000 of appropriated retained earnings for the…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Snowbird Company is constructing a building that qualifies for interest capitalization. It is built…

A: Interest on Specific borrowing is to be capitalized from 1st April (Date from which recognition…

Q: During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for…

A: Since it is given weighted average expenditure for capitalization, we consider the borrowing are…

Q: Ven Company is a retailer. In 2021, its before-tax net income for financial reporting purposes was…

A: In the given case, Ven Company included a $150,000 gain from the sale of land in its gross income…

Q: apitalization of interest during 2021 amounted to P 23,600,000. The existing debt of Colorado are…

A: SOLUTION- CAPITALIZATION RATE = (TOTAL INTEREST / TOTAL BORROWING ) *100…

Q: ) Debt covenants or restrictions are commonly used in lending agreements. Discuss how they are used…

A: Debt covenants: These are the rules & regulations mentioned in the agreement of loan between a…

Q: BTS Inc. started construction of a building for its own use on January 1, 2021.   Upon completion at…

A: Businesses raise money to finance their projects and expansion activities. The financing is made…

Q: Jules Company started construction of a low-rise building for its own use on January 1, 2021.   Upon…

A: The question is related to Borrowing Cost. There are two types of Borrowing  1. Specific purpose…

Q: WHITE started constructing a building to be used for producing its goods in January 2021, WHITE…

A: We know that IAS 23( Borrowing costs) deals with capitalizing borrowing costs that are incurred in…

Q: Early in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand…

A: Journal in book keeping and accounting means a book of accounts to record the monetary transactions…

Q: Black Widow Company borrowed P15,000,000 at 12% to finance in part the construction of a new…

A: Answer Calculation of amount of interest to be capitalized Average expenditures on warehouse =…

Q: Sulo Company had the following borrowings during 2021. The borrowing were made for general purposes…

A: Borrowing cost means where the assets like building , take substantial time to build , then interest…

Q: 6. ISKOLAR started constructing a building to be used for producing its goods in January 2021.…

A: Borrowing cost means where the assets like building , take substantial time to build , then interest…

Q: On January 1, 2021, Shangrila Company borrowed P2,000,000 at an interest rate of 12% specifically…

A: Borrowing Cost: Borrowing costs are interest and other costs incurred by an entity for borrowing…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.