NANGUTANG started constructing a building for its own use on January 1, 2020. NANGUTANG provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Interest Rate Amount of loan Cost 5% P10,000,000 P 500,000 10% 20,000,000 2,000,000 Total P30,000,000 P2,500,000 Construction expenditures: July 1, 2020 7,000,000 November 31,2020 3,000,000 December 31, 2020 1,000,000 The amount of borrowing cost that should be charged to profit or loss for the period is? O 2.208,450 • 340,142 O 2,187,625 O 312.375
NANGUTANG started constructing a building for its own use on January 1, 2020. NANGUTANG provided the following information related to the construction: Outstanding loans of the Company at January 1, 2020: Interest Interest Rate Amount of loan Cost 5% P10,000,000 P 500,000 10% 20,000,000 2,000,000 Total P30,000,000 P2,500,000 Construction expenditures: July 1, 2020 7,000,000 November 31,2020 3,000,000 December 31, 2020 1,000,000 The amount of borrowing cost that should be charged to profit or loss for the period is? O 2.208,450 • 340,142 O 2,187,625 O 312.375
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The amount of borrowing cost that should be charged to profit or loss for the period is?
Transcribed Image Text:NANGUTANG started constructing a building for its own use on January 1, 2020. NANGUTANG provided the following information related to the construction:
Outstanding loans of the Company at January 1, 2020:
Interest
Interest Rate Amount of loan
Cost
5%
P10,000,000 P 500,000
10%
20,000,000 2,000,000
Total
P30,000,000 P2,500,000
Construction expenditures:
July 1, 2020
7,000,000
November 31,2020
3,000,000
December 31, 2020
1,000,000
The amount of borrowing cost that should be charged to profit or loss for the period is?
O 2,208,450
340,142
O 2,187.625
O312.375
Transcribed Image Text:NANGUTANG started constructing a building for its own use on January 1, 2020. NANGUTANG provided the following information related to the construction:
Outstanding loans of the Company at January 1, 2020:
Interest
Interest Rate Amount of loan
Cost
5%
P10,000,000 P 500,000
10%
20,000,000 2,000,000
Total
P30,000,000 P2,500,000
Construction expenditures:
July 1, 2020
7,000,000
November 31,2020
3,000,000
December 31, 2020
1,000,000
The amount of borrowing cost that should be charged to profit or loss for the period is?
O 2,208,450
340,142
O 2,187.625
O312.375
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