On 1 January 2019 Ravioli plc began construction of a new factory. The work was completed on
Question:
On 1 January 2019 Ravioli plc began construction of a new factory. The work was completed on 31st December 2020. The costs related to the construction are shown below: £m Acquisition of land 6.0 Planning application and legal fees 0.5 Architect and engineering fees 0.9 Site preparation of the land 1.1 Construction materials 3.4 Construction labor 3.3 Included in the £3m of construction materials is £200,000 of timber that was not stored properly. The timber rotted before it could be used and had to be thrown away. Ravioli has various general loans outstanding during the period. The details are:
• £8m loans at an interest rate of 4%
• £6m loans at an interest rate of 5%
• £10m loans at an interest rate of 5.8%
Calculate the cost of the property, plant, and equipment to present in the Statement of financial position as of 31st December 2020.
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III