Sulo Company had the following borrowings during 2021. The borrowing were made for general purposes but the proceeds were used to finance the construction of new building. 12% bank loan – Principal – 3,000,000; Interest – 360,000 14% long term loan – Principal -5,000,000; Interest – 700,000 The construction began on January 1, 2021 and was completed on December 31, 2021. Expenditures on the building were 2,000,000 on January 1, 2,000,000 on June 30 and 1,000,000 in December 31. Required: Compute the cost of the building.
Sulo Company had the following borrowings during 2021. The borrowing were made for general purposes but the proceeds were used to finance the construction of new building. 12% bank loan – Principal – 3,000,000; Interest – 360,000 14% long term loan – Principal -5,000,000; Interest – 700,000 The construction began on January 1, 2021 and was completed on December 31, 2021. Expenditures on the building were 2,000,000 on January 1, 2,000,000 on June 30 and 1,000,000 in December 31. Required: Compute the cost of the building.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sulo Company had the following borrowings during 2021. The borrowing were made for general purposes but the proceeds were used to finance the construction of new building.
12% bank loan – Principal – 3,000,000; Interest – 360,000
14% long term loan – Principal -5,000,000; Interest – 700,000
The construction began on January 1, 2021 and was completed on December 31, 2021.
Expenditures on the building were 2,000,000 on January 1, 2,000,000 on June 30 and 1,000,000 in December 31.
Required:
Compute the cost of the building.
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