The following transaction pertain to the general borrowings made during 2014 by Victory Company in connection...

 

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The following transaction pertain to the general borrowings made during 2014 by Victory Company in connection with the construction of the company's new warehouse: 8% bank loan 6% short-term note 8% long-term note Principal P2,400,000 1,600,000 2,000,000 Borrowing Costs P192,000 96,000 160,000 The construction started on January 1, 2014 and the warehouse was completed on December 31, 2014. Expenditures on the warehouse were as follows: January 1 March 31 June 30 P 400,000 1,000,000 1,200,000 September 30 December 31 A. How much is the capitalizable borrowing cost of Victory Company? B. Compute the cost of the new warehouse. P1,000,000 400,000 The following transaction pertain to the general borrowings made during 2014 by Victory Company in connection with the construction of the company's new warehouse: 8% bank loan 6% short-term note 8% long-term note Principal P2,400,000 1,600,000 2,000,000 Borrowing Costs P192,000 96,000 160,000 The construction started on January 1, 2014 and the warehouse was completed on December 31, 2014. Expenditures on the warehouse were as follows: January 1 March 31 June 30 P 400,000 1,000,000 1,200,000 September 30 December 31 A. How much is the capitalizable borrowing cost of Victory Company? B. Compute the cost of the new warehouse. P1,000,000 400,000

Answer rating: 100% (QA)

A To calculate the capitalizable borrowing cost we need to determine the weighted average of the bor... View the full answer