Burger Company constructed its own building which qualifies for interest capitalization. Burger incurred the following cost and had the following outstanding borrowings while the building is under construction. January 1, 2022 P3,000,000 March 31, 2022 2,500,000 June 30, 2022 2,100,000 November 1, 2022 1,275,000 September 1, 2023 5,575,200 Outstanding borrowings: Dated January 1, 2022 - 3,000,000; 7% (specific) Dated January 1, 2022 - 2,000,000; 10% (general) Dated January 1, 2023 - 4,000,000; 8% (general) The construction was completed on December 31, 2023 and ready for its intended use. How much is the initial cost of the building when completed on December 31, 2023 in Burger financial position?
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Burger Company constructed its own building which qualifies for interest capitalization. Burger incurred the following cost and had the following outstanding borrowings while the building is under construction.
|
January 1, 2022 |
P3,000,000 |
|
March 31, 2022 |
2,500,000 |
|
June 30, 2022 |
2,100,000 |
|
November 1, 2022 |
1,275,000 |
|
September 1, 2023 |
5,575,200 |
Outstanding borrowings:
|
Dated January 1, 2022 - 3,000,000; 7% (specific) |
|
Dated January 1, 2022 - 2,000,000; 10% (general) |
|
Dated January 1, 2023 - 4,000,000; 8% (general) |
The construction was completed on December 31, 2023 and ready for its intended use.
How much is the initial cost of the building when completed on December 31, 2023 in Burger financial position?
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