Eden Enterprises (EE) started construction of its office building on August 31, 2013. Treasury department

arranged a loan of Rs. 14 million specifically for this construction on November 30, 2013 from Bank A at

15% per annum.

A contractor was hired for this construction and a total price of Rs. 18 million was agreed. Remaining 4

million were to be financed by an existing running finance carrying markup of 18% per annum. The

contractor submitted the invoices as follows:

Date Value (Rs.)

31-10-13 6,300,000

31-12-13 8,400,000

31-03-14 2,100,000

During 2014, certain changes in design were agreed with contractor which changed the contract price of

building to Rs. 22 million. Due to the requirement of additional funds, management decided to arrange

another loan from Bank B. A loan of Rs. 5 million was arranged on June 1, 2014 at 16.5% per annum. Due

to certain disputes with contractor, construction work was stopped for the month of April 2014. Work

was recommended from start of May 2014 and following invoices were submitted:

Date Value (Rs.)

30-06-14 4,100,000

30-09-14 1,100,000

Construction was completed on September 30, 2014. Contractor invoices were paid one month in arrears.

Surplus funds were kept in a deposit account yielding a return of 6% per annum.

Required: Compute the cost of office building / capital work in progress as at December 31, 2013 and