Solomon Company constructed its own office building. The company hada P 1,000,000 two-year 12% loan specifically obtained to finance theasset construction. The construction began on January 1, 2021 and thebuilding was completed on December 31, 2021. Expenditures on thebuilding were made as follows:January 1, 2021 - P 1,600,000April 30, 2021 - P 600,000• November 11, 2021 - P 1,200,000Solomon has the following outstanding general borrowings: BPI at 10%for P 1,500,000 and BDO at 12% for P 2,500,000.QUESTION 1:How much is the borrowing to be capitalized by Solomon Company?P 256,800QUESTION 2:How much is the total finance cost for the year 2021?

As per accounting standard of borrowing cost if general borrowing is used in construction of…

Answered: astructed its own office buildin r 12%…

astructed its own office buildin r 12% loan specifically obtain e construction began on Janua d on December 31, 2021. Exp follows:

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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Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9] In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year- end Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Cost incurred during the year Estimated costs to complete as of year- end Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2-b. In the journal below, complete the…
Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9] In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year-end Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc."…
Problem 1 - Percentage of completion ABC Co. Uses the percentage of completion method to account for its construction contracts. Information on a recently completed contract with a fixed contract price of P9,100,000 is shown below: 2021 2022 2023 Costs incurred to date 2,000,000 6,300,000 ? Profit recognized each year 250,000 1,550,000 400,000 Requirement: Compute for the balance of the following A. Cost Incurred during 2023 B. Cost Incurred to date 2023
Save & Exit Check m Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $85,000, Manufacturers Southern's fiscal year ends December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provlded.) Related Informationt Lease term 2 years (8 quarterly periods) $15,000 at the beginning of each period Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate 2 years $112,080 88 Required: 1. Show how International Machines determined the $15,000 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Show how International Machines determined the $15,000…
A B E 2 Determine the maturity date and compute interest for each note. 3 Days to be used per year 360 days 4 Note Contract Date Principal Interest Rate Period of Note (Term) 6. 1 1-Mar $10,000 6% 60 days 7 2 15-May 15,000 8% 90 days 8 3 20-Oct 8,000 4% 45 days 9. 10 Required: 11 12 (Use cells A5 to F8 from the given information to complete this question.) 13 14 Note Contract Date Maturity Date Interest Expense 15 16 17 3 18
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Using completed-contract method: Record the journal entries for ACE corporation for 2001, 2002, and 2003 Record the partial balance sheet for 2003 for just the Asset section in a A. В. suitable format ACE Construction Corporation Contract Price: $1,500,000 2001 2002 2003 Costs incurred during the current year Estimated costs to complete at year-end 1,000,000 Progress billings during year Collections on billings during the year $1,350,000 $1,360,000 460,000 575,000 555,000 $1,365,000 300,000 270,000 625,000 675,000
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Indicate the tramsaction prie for this situation and when revenue will be recognized Groupo sels goods to Magnus for $500,000 payment due in two installments first installment payable in 18 months and the second paymend due 6 months later. The present value of the future payments is $464,000 O $500.000 recognized at the point of sale O $464.000 reciognized at the point of sale and recognized interest revenue over the payment period O $500.000 recognize $250,000 in 18 months and $250,000 recognized 6 months later $500.000 recognize $464 000 revenue and $36.000 of interest revenue