were P2,000,00C on January 1, P1,000,000 on March 31 andThe construction began on January 1, 2020 and was completedon December 31, 2020. The expenditures on the constructionProblem 25-2 (IFRS)On January 1, 2020, Shangrila Company borrowed P2,000,000at an interest rate of 12% specifically for the construction of anew building.The actual interest cost on this specific borrowing was P240,000but interest of P10,000 was earned from the temporaryinvestment of the borrowing proceeds.Shangrila Company also had the following other loans in 2020which were borrowed for general purposes but the proceedswere used in part for the construction of the building.'PrincipalInterest10% bank loan3,000,0005,000,000300,000600,00012% long term loanP3,000,000 on September 30.Required:Compute the cost of the new building.

Concept of borrowing Cost Accounting for fixed assets

On January 1, 2020, Shangrila Company borrowed P2, at an interest rate of 12% specifically for the construct new building. The actual interest cost on this specific borrowing was F but interest of P10,000 was earned from the tem investment of the borrowing proceeds. Shangrila Company also had the following other loans which were borrowed for general purposes but the were used in part for the construction of the huildin

On January 1, 2020, Shangrila Company borrowed P2, at an interest rate of 12% specifically for the construct new building. The actual interest cost on this specific borrowing was F but interest of P10,000 was earned from the tem investment of the borrowing proceeds. Shangrila Company also had the following other loans which were borrowed for general purposes but the were used in part for the construction of the huildin

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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