The Great Company started the construction of a building on March 1, 2020 and finished it on June 30, 2021. You have the following information about the expenditures incurred on the construction in 2020: March 1 $120,000 April 30 290,000 October 1 340,000 November 1 275,000 The Great company took out a one-year loan of $500,000 on April 1, 2020. The annual interest rate is 6%. The company’s general borrowings are as follows: Amount Annual interest rate 2-year Note payable, issued on March 1, 2019 $120,000 6% 1-year bank loan taken out on April 1, 2020 210,000 4% 2-year bank loan taken out on October 1, 2018 340,000 3% Required- Assuming IFRS, determine the carrying value of the asset under-construction on December 31, 2020.
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Accounting
The Great Company started the construction of a building on March 1, 2020 and finished it on June 30, 2021. You have the following information about the expenditures incurred on the construction in 2020:
|
March 1 |
$120,000 |
|
April 30 |
290,000 |
|
October 1 |
340,000 |
|
November 1 |
275,000 |
The Great company took out a one-year loan of $500,000 on April 1, 2020. The annual interest rate is 6%.
The company’s general borrowings are as follows:
|
|
Amount |
Annual interest rate |
|
2-year Note payable, issued on March 1, 2019 |
$120,000 |
6% |
|
1-year bank loan taken out on April 1, 2020 |
210,000 |
4% |
|
2-year bank loan taken out on October 1, 2018 |
340,000 |
3% |
Required-
Assuming IFRS, determine the carrying value of the asset under-construction on December 31, 2020.
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