The construction of a warehouse by Abochi Limited is expected to be completed in approximately 18 months. On January 1, 2020, work got underway. In 2020, the following payments were made:

P200,000 on January 31,

P450,000 on March 31,

P100,000 on June 30,

P200,000 on October 31, and

P250,000 on November 30.

The entity's debt pool was used to finance the first payment, which was made on January 31. Nevertheless, the organization was able to get a medium-term loan for P800,000 as of March 31, 2020, with a basic interest rate of 9% annually, computed and due each month.

These monies were used especially for this building project. Extra money was temporarily invested in arrears, payable in cash, at a rate of 6% annually. The November 30 payment, which was not able to be covered by the medium-term loan, was once more made using P200,000 from the debt pool.

For three weeks in May, the building process was put on hold while significant administrative and technical work was completed. In accordance with IAS 23, Abochi Limited implemented the capitalization of borrowing costs accounting strategy.

The following debt amounts were unpaid as on December 31, 2020, the date of the balance sheet.

Medium-term loan (see description above) -800,000

Bank Overdraft -1,200,000

(The weighted average amount outstanding during the year was P750,000 and the total interest charged by the bank amounted to P33,800 for the year)

A 10%, 7-year note dated October, 2025 with simple interest 9,000,000 payable annually at December 31.

You are required to;

a. Calculate the total amount to be capitalized as borrowing cost

b. Calculate the total cost of the warehouse