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How much is the cost of the qualifying asset

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Question - 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) P1,000,000

10% bank loan (3 years) P8,000,000

Expenditures made on the qualifying asset were as follows:

Jan 1 5,000,000

March 1 4,000,000

August 31 3,000,000

December 1 2,000,000

Construction was completed on December 31, 20x1

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

a. P 15,045,000

b. P 14,971,111

c. P 14,920,000

d. P 13,010,000

e. Answer not given

Reference no: EM132567834

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