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Financial reporting

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Financial reporting

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • March 20, 2024 at 10:02 am #703207
    chan98
    Participant
    • Topics: 2
    • Replies: 0
    • ☆

    An entity started construction on a building for its own use on 1 April 20X7 and incurred the following costs:
    $000
    Purchase price of land 250,000
    Stamp duty 5,000
    Legal fees 10,000
    Site preparation and clearance 18,000
    Materials 100,000
    Labour (period 1 April 2007 to 1 July 2008) 150,000
    Architect’s fees 20,000
    General overheads 30,000
    –––––––
    583,000
    –––––––
    The following information is also relevant:
    Material costs were greater than anticipated. On investigation, it was found that materials costing $10 million had been spoiled and therefore wasted and a further $15 million was incurred on materials as a result of faulty design work.
    As a result of these problems, work on the building ceased for a fortnight during October 2007 and it is estimated that approximately $9 million of the labour costs relate to this period.
    The building was completed on 1 July 20X8 and occupied on 1 September 20X8.
    Required:
    Calculate the cost of the building that will be included in tangible non-current asset additions.

    March 21, 2024 at 7:31 pm #703280
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    I refer you to my answer to your other post as to what you need to do.

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    Posts
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