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

Q: During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated…

A: the amount of interest capitalized for 2020 Construction Loan * Rate of borrowing +…

Q: YONEX Company constructed an asset for its own use. Construction started on January 1, 2019 and the…

A: Self Constructed Assets Sometimes company may taken the decision to develop the assets from its own…

Q: Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan…

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

Q: Bucky Company had loans outstanding during 2019 and 2020. Specific construction loan: P2,000,000 ---…

A: Borrowing costs are interest and other costs incurred in connection with funds borrowed. It Includes…

Q: Assume that Vaughn completed the office and warehouse building on December 31, 2020, as planned at a…

A: Depreciation:   Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan…

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

Q: Jewelry Company had the following outstanding loans during 2017 and 2018. Specific construction loan…

A: Working note: Computation of interest to be capitalized:

Q: Solomon Company constructed its own office building. The company had a 1,000,000 two-year 12% loan…

A: Weighted average borrowing rate = (1500, 000*10%) +(2500, 000*12%) /(1500, 000+2500, 000)  = (150,…

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: Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan…

A: Cost of building will include the expenses incurred on the construction of building and interest on…

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

A: Given data, Company borrowed P15,000,000 at 12% interest rate Expenditure =P10,000,000   ●1.What…

Q: was finished late in 2020 were incurred evenly during the a cost of P30,000,000. The expenditures…

A: Capitalized  interest = Interest loan for construction * Rate

Q: AyayaiFurniture Company started construction of a combination office and warehouse building for its…

A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its…

Q: Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a new building for its own use.…

A: Amounts owed for cash borrowed are referred to as debt. The lender agrees to lend money to the…

Q: On January 2, 2021, Ramtha began construction of a new building. The automated plant was finished…

A:

Q: intermediate accounting

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

Q: On January 1, 2021, John Kyle Corporation acquired land that will be used for management's office.…

A: The question is multiple choice question amd is related with Borrowing Cost. Required  Choose the…

Q: Novak, Inc. has a fiscal year ending April 30. On May 1, 2020, Novak borrowed $10,728,000 at 11% to…

A: Interest to be capitalized to building  since it is a qualifying asset

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: on January 1, 2020, Katrina Company obtained a loan of P4,000,000 at anpomt interest rate of 10%…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS     Solution       Amount P   Total borrowing…

Q: Tamarisk Furniture started construction of a combination office and warehouse building for its own…

A: Borrowing costs are the interest and other expenses incurred by a company when it borrows money.

Q: Stellar Furniture Company started construction of a combination office and warehouse building for…

A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its…

Q: On January 1, 2021, John Kyle Corporation acquired land that will be used for management's office.…

A: PPE (property, plant & Equipment) is the total fixed asset which is being used to provide the…

Q: On January 2, 2020, IRG Company began the construction of a small processing plant. The plant was…

A: a) Weighted-average accumulated expenditures for 2020. Jan 2, 2020 200000 x 12/12 200000 Sep…

Q: BlossomFurniture Company started construction of a combination office and warehouse building for its…

A: Given: Estimated cost = $7,000,000 Total cost = $7,280,000 Accumulated expenditures = $5,040,000

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: the following payments to ABC Construction company during 2018: January 1…

A: The initial recording of all monetary business transactions in a systematic way is known as journal…

Q: On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its…

A: Date Expenditure x Weight = Average January 1 $600,000 x 12/12 = $600,000 March 31  1,200,000 x…

Q: Innuendo Company had the following loans outstanding for the entire year 2021. Specific…

A: Accrual accounting is a system in which expenses and revenues are recorded at the time of the…

Q: ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan…

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

Q: On January 1, 2021, the company obtained a $3 million loan with a 10% interest rate. The building…

A: Weighted average rate of debt = Total Interest Amount / Total Borrowings Amount

Q: 1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the…

A: Given: Loan on Jan 1 2021 = $ 3 million Interest rate = $ 10 % Expenses:  January 1, 2021 =…

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: Assume that Sandhill completed the office and warehouse building on December 31, 2020, as planned at…

A:

Q: IvanhoeFurniture Company started construction of a combination office and warehouse building for its…

A: SOLUTION- GIVEN THAT, ESTIMATED COST = $10500000 TOTAL COST = $10920000 ACCUMULATED EXPENDITURES…

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

A: Solution: Weighted average interest rate of all other debt Debt Amount Interest rate Interest…

Q: On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished…

A: Working:

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: tiger Woods makes the following construction related expenditures: 450,000 on January 1 2021 300,000…

A:

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

A: Borrowed = 10,000,000 at 12% Expenditures = 8,000,000 Entity earned interest = 80,000

Q: SandhillFurniture Company started construction of a combination office and warehouse building for…

A: The avoidable interest is simply the interest that would have been avoided if the expenditure on…

Q: IvanhoeFurniture Company started construction of a combination office and warehouse building for its…

A: As per IAS 23,  All the borrowing cost related to acquisition, construction or production of a…

Q: ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan…

A: The expenditures incurred by ABC Company are calculated as per the weighted average method and…

Q: Coal Company began constructing a building for its own use in January 2023.  During 2023, Coal…

A: Interest cost is generally treated as finance cost and is charged to the profit and loss account. It…

Q: Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Jen Company had a 10% P1,000,000 specific construction loan and 12% P20,000,000 general loan…

A: As per IAS 23 , Borrowings costs that are attributable to qualified asset will form part of cost of…

Q: Rona Co. had 9% P2,000,000 specific construction loan and 12% P15,000,000 general loan outstanding…

A: Cost of an asset is the expenditure incurred on it from purchasing or constructing to the point it…

Q: Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a new building for its own use.…

A: Amount of interest capitalized related to the construction of the building: Amount borrowed = $ 1…

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.