What is the correct cost of the building? ₱ 52,814,548₱ 52,000,000₱ 52,780,548₱ 50,780,548₱ 50,000,000 Welders Corporation engaged you for the first time to audit their financialstatements as of and for the period ended December 31, 2020. In auditingtheir PPE, you were able to obtain the balance of their Building account.One of the items under the building account has a cost of P50,000,000,and a related accumulated depreciation of P7,500,000. Based from yourinvestigation, you were able to gather the following information:• Welders decided to construct a new building for their operations, andstarted the construction on January 2, 2017. The entity finished theconstruction on December 30, 2017, and occupied the building onJanuary 1, 2018.• Before the construction, the entity obtained a loan on January 1, 2017specifically to finance the construction of the building. The facevalue of the loan is P20,000,000, with an interest rate of 10%. Theloan is due on December 31, 2021.• On December 31, 2016, the entity had outstanding loans for generalpurposes. The loans are as follows:o A P30,000,000 loan from PI Bank; 11% interest rate; maturitydate is December 31, 2020o P15,000,000 loan from PN Bank; 8.5% interest rate; maturitydate is December 31, 2023• The schedule of payments made by the entity during the constructionare as follows:/ January 2/ March 31/ June 30/ July 31/ December 31• The building has no residual value9,000,0008,700,0004,300,00024,000,0004,000,000Note: Round-off any rates to two decimal places (xx.xx%)

Non Current Assets One of the important part in the assets side of the balance sheet is non current…

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What is the correct cost of the building? ₱ 52,814,548 ₱ 52,000,000 ₱ 52,780,548 ₱ 50,780,548 ₱ 50,000,000

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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