Question: BE10.2 (LO 2) Zhang Ltd. is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were HK$1,800,000 on March

BE10.2 (LO 2) Zhang Ltd. is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were HK$1,800,000 on March 1, HK$1,200,000 on June 1, and HK$3,000,000 on December 31. Compute Zhangs average carrying amount for borrowing cost capitalization purposes.

BE10.3 (LO 2) Zhang Ltd. (see BE10.2) had outstanding all year a 10%, 5-year HK$4,000,000 note payable and an 11%, 4-year HK$3,500,000 note payable. Compute the capitalization rate used for borrowing cost capitalization purposes.

BE10.4 (LO 2) Using the information from BE10.2 and BE10.3, determine the amount of borrowing cost that Zhang Ltd. would capitalize.

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