Solution-How much is cost of qualifying asset on initial

How much is cost of qualifying asset on initial recognition

Assignment Help Cost Accounting

Reference no: EM132715428

On January 1, 2020, El Industries 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)

P 1,000,000 10% bank loan (3 years) 8,000,000

Expenditures made on the qualifying asset were as follows:

January 1 P 5,000,000

March 1 4,000,000

August 31 3,000,000

December 1 2,000,000

Construction was completed on December 31, 2020

Required:

Problem 1. How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

Problem 2. How much is the cost of the qualifying asset on initial recognition?

Reference no: EM132715428

Questions Cloud

Brainstorm-research and narrow your focus : Why is the topic interesting to you? Is this a problem that you have encountered before and tried to "fix"? If so, what worked and what did not?

What stock prices will : If information does not arrive randomly and the market rapidly and accurately adjusts to any new information, What stock prices will?

Calculate the overhead cost of production support activity : ABC co. has identified the following two overhead cost items and 3 activities. Calculate the overhead cost of production support activity

Financial service and product needs : As we learned in the last assignment, you have graduated from George Brown College and landed a great job with a leading financial institution.

How much is cost of qualifying asset on initial recognition : How much is the cost of the qualifying asset on initial recognition? How much borrowing costs are capitalized to the cost of the constructed qualifying asset?

Data warehousing : We live in a world of data, perhaps too much data. Organizations continue to store data indefinitely.

Find the macaulay duration of a perpetuity-due : Find the Macaulay duration of a perpetuity-due with level annual payments at an effective annual rate of interest of 3.

What is the amount of sales discount allowable : Merchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for $22,900. What is the amount of sales discount allowable

Find the modified duration of the asset : An asset provides two cash inflows: $230 in 2 years and $900 in 7 years. Given an effective annual interest rate of 3%, find the modified duration of the asset.

User Account

All Pages

How much is cost of qualifying asset on initial recognition

Reference no: EM132715428

Reference no: EM132715428

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT