Reference no: EM132615389

Question - Jam Co's new warehouse began its construction on April 1, 2021. The following costs were incurred on the construction (amount in peso):

Construction contract price 4,500

Architect fees 620

Construction workers barracks 1,650

Materials 7,8000

Direct labor costs 11,200

Legal Fees 2,400

General and admin cost 940

The warehouse was completed on January 1, 2022 and brought into use following its grand opening on the April 1, 2022. Jam Co's issued a 25 million unsecured loan on April 1, 2021 to aid construction of the new store (which meets the definition of a qualifying asset per IAS 23). The loan carried an interest rate of 8% per annul and is payable on April 1, 2024.

Required -

1. How should the above information be accounted for in the financial statements?

2. Journal entry to record the above transactions.

3. List what impact the above information would have on the statement of profit or loss (if any) for the year ended 31 March 2022.