The DUCK Company self constructed an asset for its own use. Construction started on January 1,2018 and the asset was completed on December 31,2018. Costs incurred during the year were as follows:   January1- P 400,000 April- 500,000 August1 - 480,000 December1- 180,000   If the company had a two year, 18% loan of P 500,000, specially obtained to finance the asset construction, what is the capitalized interest added to the cost of the self-constructed asset?

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
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The DUCK Company self constructed an asset for its own use. Construction started on January 1,2018 and the asset was completed on December 31,2018. Costs incurred during the year were as follows:
 
January1- P 400,000
April- 500,000
August1 - 480,000
December1- 180,000
 
If the company had a two year, 18% loan of P 500,000, specially obtained to finance the asset construction, what is the capitalized interest added to the cost of the self-constructed asset?

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