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

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Q: Jazz company started construction on a building on January 1 of this year and completed construction…

A: Average accumulated expenditures = 250000

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Q: On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the…

A: Interest on loan = Amount borrowed x rate of interest x no. of years = ₱5,000,000 x % x 1 = ₱500,000

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

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A:

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Q: On January 1, 20x1, Entity A obtained a 12% ₱6,000,000 loan, specifically to finance the…

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A:

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A:

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

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Q: On January 1, 2020, Shangrila Company borrowed P2, at an interest rate of 12% specifically for the…

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Q: On January 1 of the current year, Positive Entity borrowed P1,600,000 at an interest of 10%…

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Q: During 2004, Bell Corporation constructed assets costing P750,000. The weighted-average accumulated…

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Q: Agency XYZ received from DBM allotment for capital outlay and NCA amounting to P15 million and P10…

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

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

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.