were P2,000,00C on January 1, P1,000,000 on March 31 and The construction began on January 1, 2020 and was completed on December 31, 2020. The expenditures on the construction Problem 25-2 (IFRS) On...

Extracted text: were P2,000,00C on January 1, P1,000,000 on March 31 and The construction began on January 1, 2020 and was completed on December 31, 2020. The expenditures on the construction Problem 25-2 (IFRS) On January 1, 2020, Shangrila Company borrowed P2,000,000 at an interest rate of 12% specifically for the construction of a new building. The actual interest cost on this specific borrowing was P240,000 but interest of P10,000 was earned from the temporary investment of the borrowing proceeds. Shangrila Company also had the following other loans in 2020 which were borrowed for general purposes but the proceeds were used in part for the construction of the building. 'Principal Interest 10% bank loan 3,000,000 5,000,000 300,000 600,000 12% long term loan P3,000,000 on September 30. Required: Compute the cost of the new building.