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Compute for the average accumulated expenditures

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Question - During 2020 and 2021 Marvick Corporation build a building for its own use. The expenditures on the construction were as follows:

January 1, 2020 P1,100,000

May 1, 2020 480,000

July 1, 2020 640,000

September 1, 2020 360,000

February 1, 2021 540,000

The construction was completed on March 31, 2021. Marvick obtained a construction loan from its bank for P3,200,000 on January 1, 2019. This loan had a 10% annual rate. Marvick's only other outstanding debt during the period January 1, 2020 to March 31,2021S, consisted of two long-term notes. This note has a principal amounts of P3,000,000 and P6,000,000 and annual interest rate of 11% and 12% respectively.

Instructions - Compute for the average accumulated expenditures, interest to be capitalized and total cost of the asset in 2020 and 2021.

Reference no: EM132740353

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