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1. Jennie Lynne Company started construction of a new building on January 1, 2019, and moved in to the finished building on December 31, 2019. The total cost of the building was P40,000,000 and was incurred evenly throughout the year. Jennie Lynne had the following borrowings outstanding during 2019: Principal Borrowing Cost Bank Loan 25,000,000 2,500,000 Short term note 10,000,000 1,500,000 Long term note 15,000,000 1,800,000 Total 50,000,000 5,800,000 The borrowings were made for general purpose and the proceeds were partly used to finance the construction of the new building. The total cost of the building is? 42,320,000 b. 44,640,000 C. 40,000,000 d. 45,800,000 2. Cecilia Company acquired 50,000 shares of Estrella, Inc. common stock on October 5, 2017 at a cost of P6,000,000. On April 10, 2019, Estrella distributed a 20% common stock dividend when the market price of the stock was P125 per share. On December 20, 2019, Cecilia sold 20,000 shares of its Estrella stock for P150 per share. For the year ended December 31, 2019, how much should Cecilia report as gain on sale? a. 1,000,000 b. 3,000,000 600,000 d. 2,000,000 3. On April 1, 2018, Fenalon Company purchased P8,000,000 face value, 9% treasury notes for P7,430,000 including accrued interest of P180,000. The notes mature July 1, 2019 and pay interest semiannually on January 1 and July 1. Fenalon uses the straight-line method of amortization and intends to hold the notes to maturity. In its October 31, 2018 balance sheet, the carrying amount of this investment should be a. 8,000,000 b. 7,600,000 C. 6,900,000 d. 7,350,000