(D) ABC Corporation funded the construction of its new plant throughboth specific and general borrowing. Details are as follows:Amount SpentDateP 4,800,0006,000,000Jan. 1, 2021Oct. 30, 2021Borrowing Interest Rate Principal Amt.P 5,000,00010,000,000Investment IncomeP 100,00050,000Specific7%General10%10. How much is the average carrying value of the equipmentduring the year?11. How much is the capitalizable borrowing cost for the year?12. How much is the interest expense to be reported in theincome statement for the year?

Step 1 Borrowing cost is the cost which is interests and other cost, which is directly incurred for…

10. How much is the average carrying value of the equipme during the year? 11. How much is the capitalizable borrowing cost for the ye 12. How much is the interest expense to be reported in the income statement for the year?

10. How much is the average carrying value of the equipme during the year? 11. How much is the capitalizable borrowing cost for the ye 12. How much is the interest expense to be reported in the income statement for the year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

(D) ABC Corporation funded the construction of its new plant through
both specific and general borrowing. Details are as follows:
Amount Spent
Date
P 4,800,000
6,000,000
Jan. 1, 2021
Oct. 30, 2021
Borrowing Interest Rate Principal Amt.
P 5,000,000
10,000,000
Investment Income
P 100,000
50,000
Specific
7%
General
10%
10. How much is the average carrying value of the equipment
during the year?
11. How much is the capitalizable borrowing cost for the year?
12. How much is the interest expense to be reported in the
income statement for the year?

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