Determine carrying amount of the building on December 31, 2020.
Company A entered into a P4,500,000 fixed-price contract with a contractor on March 1, 2019 for the construction of an office building. The building was completed and occupied on September 30, 2020. Additional construction costs were incurred as follows:
Plans, specifications and blueprints 18,000
Architect's fees for design and supervision 142,500
The building is estimated to have a 40-year useful life from the date of completion and will be
To finance the construction cost, the company borrowed P4,500,000 on March 1, 2019. The loan is payable in 10 annual installments of P450,000 plus interest at the rate of 10%. The company used part of the loan proceeds for
For the period March 1 to December 31, 2019 1,350,000
For the period January 1 to September 31, 2020 3,450,000
Determine carrying amount of the building on December 31, 2020.
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