IAS 23On January 1, 2019, Haven Company loaned P24,000,000 from a bank in order to finance specifically therenovation of a building. The renovation work started on the same date.The loan carried annual interest at 10%. Work on the building was substantially complete on October 31, 2019.The loan was repaid on December 31, 2019 and P200,000 investment income was earned in the period toOctober 31 on the proceeds of the loan not yet used for the renovation.1. What is the amount of capitalizable borrowing cost should be included in the cost of the building?a. 2,400,000b. 2,200,000c. 2,000,000d. 1,800,0002. What amount should be reported as interest expense for 2019?a. 800,000b. 400,000c. 200,000d. 0Matthew Company borrowed P4,000,000 on a 10% note payable to finance a new warehouse which the entity isconstructing for own use.The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building. At the end of thecurrent year, average accumulated expenditures on the new warehouse totaled P4,750,000.3. What amount should be capitalized as interest for the current year?a. 400,000b. 475,000c. 490,000d. 522,500IAS 38Stacy Company reported the following data at year-end:FranchiseP1,000,000Computer softwareDeferred charges1,500,000100,000Patent2,500,000500,000700,000Customer list purchasedCopyrightDeposit with advertising agency to promote goodwill400,000Bond sinking fund1,300,0004,000,000GoodwillTrademark900,0002,000,000Research and development cost4. What total amount should be reported as intangible assets?a. 11,100,000b. 11,500,000c. 10,600,000d. 13,100,000 IAS 20On January 2, 2017, Parasail Company received a consolidated grant of P12,000,000. Three-fourths of the grantis to be utilized to purchase a college building for students from underdeveloped or developing countries.The balance of the grant is for subsidizing the tuition costs of those students for four years from the date of thegrant.The building was purchased in early January and is to be depreciated using the straight line method over 10years. The tuition costs paid amounted to P600,000 during the current year.9. What amount of the grant is recognized as income for the year ended December 31, 2017?a. 1,200,000b. 3,000,000c. 1,650,000d. 1,050,000

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AS 23 On January 1, 2019, Haven Company loaned P24,000,000 from a bank in order to finance renovation of a building. The renovation work started on the same date. The loan carried annual interest at 10%. Work on the building was substantially complete o The loan was repaid on December 31, 2019 and P200,000 investment income was earned October 31 on the proceeds of the loan not yet used for the renovation. 1. What is the amount of capitalizable borrowing cost should be included in the cost a. 2,400,000 b. 2,200,000 c. 2,000,000

AS 23 On January 1, 2019, Haven Company loaned P24,000,000 from a bank in order to finance renovation of a building. The renovation work started on the same date. The loan carried annual interest at 10%. Work on the building was substantially complete o The loan was repaid on December 31, 2019 and P200,000 investment income was earned October 31 on the proceeds of the loan not yet used for the renovation. 1. What is the amount of capitalizable borrowing cost should be included in the cost a. 2,400,000 b. 2,200,000 c. 2,000,000

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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