The following costs were incurred by Barak Klever Ltd in 2020 in the design and construction of a new office building over a nine-month period during 2020;
The following costs were incurred by Barak Klever Ltd in 2020 in the design and construction of a new office building over a nine-month period during 2020;
GH¢ (000)
Feasibility study Architects' fees 100
Site clearance (by external demolition professionals) 80
Construction materials 600
Cost of own inventories used in the construction
(Net realizable value if sold outside the company GH¢24,000) 30
Internal construction staff salaries during the period of construction 360
External contractor costs 2,400
Income from renting out part of the site as storage depot during the early phase of construction (12)
Required:
In accordance with IAS 16 Property, plant, and equipment, calculate the amount that Barak Klever Ltd should capitalize as property in the financial statements for the year ending 31 December 2020.
Kpogo Ltd has the following products in inventory at the end of 2019:
Units Cost per unit GH¢
XYZ (completed) 540 22
ABC (part complete) 280 26
Each product normally sells at GH¢34 per unit. Due to the difficult trading conditions, Kpogo Ltd intends to offer a discount of 15% per unit and expects to incur GH¢4 per unit in selling costs. GH¢10 per unit is expected to be incurred to complete each unit of ABC.
Required:
In accordance with IAS 2 Inventories, at what amount should inventory be stated in the financial statements of Kpogo Ltd as at 31 December 2019?
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