Rona Co. had 9% P2,000,000 specific construction loan and 12% P15,000,000 general loan outstanding during 2023 and 2024. The entity began the self-construction of a new building on August 1, 2023 and the building was completed on September 30, 2024. Expenditures during 2023 and 2024 were August 1, 2023, P2,000,000; October 1, 2023, P4,000,000; December 1, 2023, P3,000,000; and July 1, 2024, P900,000. 3) What is the cost of the new building on September 30, 2024? A . 9,225,000 B. 9,900,000 C. 10,937,250 D. 10,337,250 4) What is the interest expense for 2024? A . 1,980,000 B. 1,122,750 C. 1,167,750 D. 0

Q: Interest During Construction Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a…

A: Formulas Used: Amount of interest capitalized =Average expenditure * Rate of interest / 100 Average…

Q: Sheffield Corp. is constructing a building. Construction began on January 1 and was completed on…

A: The aggregate rate of interest charged on all debt is known as the weighted average interest rate.…

Q: In 2020, ABC Industries, Inc. constructed a new manufacturing facility at a cost of ₱12,000,000. The…

A: IAS 23 deals with the standard on borrowing cost. As per this standard borrowing cost that are…

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

A: Historical cost is the worth of an asset when it is acquired. This value is termed historical when…

Q: 2. During 20x2, Grant Industries, Inc. constructed a manufacturing facility at a cost of…

A: Given info weight average accumulated expenditure is 5400000 It must be noted that if potential…

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: In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa…

A: Requirement 4 :     2018 2019 2020 Revenue $             2,800,000 $        3,692,964 $…

Q: Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a…

A: Capitalized interest indicates the part of the interest which belongs to the capital cost of the…

Q: Compute the following:(a) Weighted-average accumulated expenditure.(b) Capitalization rate used for…

A: The interest rate used to determine the amount of interest capitalized should be equal to the rate…

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

A: Interest on specific loan for 2022 = specific construction loan x interest rate x no. of months/12 =…

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: 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: On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to…

A: a. Calculate the revenue recognition for the year 2018. Calculate the revenue recognition for the…

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

A: Amount of interest capitalized as cost of the new building: Borrowing cost to be capitalized in 2021…

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

A:

Q: Interest During Construction Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a…

A: Average Accumulated Expenditure- Weighted-average accumulated expenditure is the result of…

Q: ing. Expenditures for the completed structure totaled P8,000,000 during the year ended December 31,…

A: Given : Borrowed amount $10,000,000  Interest rate 12% Expenditures for the completed structure…

Q: On Dec 31, 2020 Laf borrowed $3,000,000 at 12% payable annually to finance construction of a new…

A: Interest expenditure is the cost paid by the firm against funds borrowed. It is a non-operating…

Q: heir customers for $1,200,000, and collected $960,000. At December 31,2019, the estimated future…

A: Revenue recognition may be defined as a principle that says that revenue will be recorded in books…

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: During 2021, Happy Company constructed asset costing P10,000,000. The weighted average expenditures…

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

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

A: Depreciation is a means of decreasing the capitalized cost of long-lived operating assets or plant…

Q: Macy company had the following loans outstanding for the entire year 2017. Specific construction…

A: Cost the new building is equal to the actual expenditure on building plus the interest on the loan…

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

A: January 1 2021    4,50,000   Oct 1 2021           3,00,000   Dec 1 2021           6,00,000   March…

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: On January 1, 2021, the company obtained a $3 million loan with a 11% interest rate. The building…

A: Total debt =Construction Loan + Value of Long Term Notes=$3,000,000 + $4,200,000 +…

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: Here, the calculation of average accumulated expenditure-2021 is shown. The total weighted…

Q: The third year of a construction project of SMDC began with a P3,000,000 balance in construction in…

A: The interest to be capitalized is based on weighted average expenditure incurred including beginning…

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

A: The question is based on the concept of Accounting Standard on Borrowing Cost.

Q: Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a…

A: a)

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

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Q: On January 1, 2020, Southtree Co. began construction of a building to be used as ils The building is…

A: Workings: Notes 1: 400000 x 8 % = 32000 Notes 2 : 700000 x 10% = 70000 Total principal Amount =…

Q: Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a…

A: Given that Borrowed $ 1000000 @ 8% Additional debt  $ 500000 @ 9%                            $…

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: Interest During Construction Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a…

A: 1. Capitalized interest-construction loan of $1,100,000:

Q: Bonita Industries is constructing a building. Construction began on January 1 and was completed on…

A: The product of expenditures on a qualified asset and a fraction reflecting the capitalization…

Q: Concord Corporation is constructing a building. Construction began on January 1 and was completed on…

A: Notes borrowed to help finance construction of the building should not be consider for the determine…

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

A: Working:

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: per, Inc., is constructing a building that qualifies for interest capitalization. The following…

A: Step 1 Borrowing cost is the Interest cost or other cost which is directly incidental to arrangement…

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: Interest During Construction Matrix Inc. borrowed $1,000,000 at 8% to finance the construction of a…

A: Construction loan= $1000000 Long term loan= $5000000 & $8000000 Interest on long term loan= 9%…

Q: Peyton Company started construction of a new office building on January 1, 20x1, and moved into the…

A: The question is multiple choice question. Required  Choose the Correct Option.