How much is the cost of the qualifying asset on initial recognition? * 15,045,000 13,010,000 14,970,900 14,920,000 Use the following information for the next two questions:On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds wasused to finance the construction of a qualifying asset:PrincipalP1,000,00012% bank loan (1.5 years)10% bank loan (3-year)P8,000,000Expenditures made on the qualifying asset were as follows:Jan.1P 5,000,0004,000,000March 1August 31December 13,000,0002,000,000Construction was completed on December 31, 20x1..How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

Here interest costs should be capitalized

Use the following information for the next two questions: On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset: Principal 12% bank loan (1.5 years) 10% bank loan (3-year) P1,000,000 P8,000,000 Expenditures made on the qualifying asset were as follows: Jan.1 P5,000,000 March 1 4,000,000 August 31 December 1 3,000,000 2,000,000 Construction was completed on December 31, 20x1. .How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

Use the following information for the next two questions: On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was used to finance the construction of a qualifying asset: Principal 12% bank loan (1.5 years) 10% bank loan (3-year) P1,000,000 P8,000,000 Expenditures made on the qualifying asset were as follows: Jan.1 P5,000,000 March 1 4,000,000 August 31 December 1 3,000,000 2,000,000 Construction was completed on December 31, 20x1. .How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

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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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

How much is the cost of the qualifying asset on initial recognition? *

15,045,000

13,010,000

14,970,900

14,920,000

Use the following information for the next two questions:
On January 1, 20x1, Entity A had the following general borrowings. A part of the proceeds was
used to finance the construction of a qualifying asset:
Principal
P1,000,000
12% bank loan (1.5 years)
10% bank loan (3-year)
P8,000,000
Expenditures made on the qualifying asset were as follows:
Jan.1
P 5,000,000
4,000,000
March 1
August 31
December 1
3,000,000
2,000,000
Construction was completed on December 31, 20x1.
.How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

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