The following costs were incurred by Ivy Nomafo Ltd in 2020 in the design and construction of a new office building over a nine-month period during 2020: GH¢000 Feasibility study 8 Architects' fees 100 Site clearance (by external demolition professionals) 80 Construction materials 600 Cost of own inventories used in the construction (net realisable value if sold outside the company GH¢24,000) 30 Internal construction staff salaries during period of construction 360 External contractor costs 2,400 Income from renting out part of site as storage depot during early phase of construction (12) Total 3,566 Required: In accordance with IAS 16 Property, plant and equipment, calculate the amount that Ivy Nomafo Ltd should capitalise as property in the financial statements for the year ending 31 December 2020.
The following costs were incurred by Ivy Nomafo Ltd in 2020 in the design and construction of a new office building over a nine-month period during 2020:
GH¢000
Feasibility study 8
Architects' fees 100
Site clearance (by external demolition professionals) 80
Construction materials 600
Cost of own inventories used in the construction (net realisable value if sold outside the company GH¢24,000) 30
Internal construction staff salaries during period of construction 360
External contractor costs 2,400
Income from renting out part of site as storage depot during early phase of construction (12)
Total 3,566
Required: In accordance with IAS 16 Property, plant and equipment, calculate the amount that Ivy Nomafo Ltd should capitalise as property in the financial statements for the year ending 31 December 2020.
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