On January 1, 2022, Kingbird Outfitters signed a fixed-price contract to have Builder Associates construct a major
Question:
On January 1, 2022, Kingbird Outfitters signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of R$3,920,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2022, to finance the construction cost, Kingbird borrowed R$3,920,000 payable in 10 annual installments of R$392,000, plus interest at the rate of 10%. During 2022, Kingbird made deposit and progress payments totaling R$1,470,000 under the contract. The excess borrowed funds were invested in short-term securities, from which Kingbird realized investment income of R$49,000. What amount should Kingbird report as capitalized borrowing cost at December 31, 2022?
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield