The following costs were incurred in 2016 in the design and construction of a new office building over a nine-month period during 2016:
GH¢000
Feasibility study 8
Architects’ fees 100
Site clearance (by external demolition professionals) 80
Construction materials 600
Cost of own inventories used in the construction
(net realisable value if sold outside the company GH¢24,000) 30
Internal construction staff salaries during period of construction 360
External contractor costs 2,400
Income from renting out part of site as storage depot
during early phase of construction (12)
3,566
Required:
In accordance with IAS 16 Property, plant and equipment, calculate the amount that should be capitalised as property in the financial statements for the year ending 31 December 2016. (4 marks)
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