Dolan Enterprises constructed a new warehouse for its distribution facility. The construction period began on May 1, 2019, and continued until October 31, 2020. Dolan began operating the warehouse on January 1, 2021. Material and labour costs totalled $5 million. Payments for these costs were made as follows: 

Dolan used internal funds to finance these payments. The company had long-term debt of $35 million to $40 million with an interest rate of 8% throughout the construction period. 

Required:

a. How much interest cost should be capitalized on the building under IFRS?

b. What is the range of financing cost that can be capitalized under ASPE?

Date May 31, 2019 July 31, 2019 September 30, 2019 November 30, 2019 June 30, 2020 August 31, 2020 October 31, 2020 Total Payment $ 900,000 700,000 700,000 700,000 800,000 800,000 400,000 $5,000,000