Company borrowed fund for the construction of manufacturing plant at Multan of Rs. 300 million from...

 

Transcribed Image Text:

Company borrowed fund for the construction of manufacturing plant at Multan of Rs. 300 million from ABL bank dated 1-1-2016 for years' period @15% pa. Construction was completed on 30 June 2017. Surplus funds were invested @10% pa. Payment Schedule 1st January 1st April 1st July 1st October Required i. ii. iii. iv. 2016 40 50 60 80 230 2017 20 50 70 2018 Calculate total interest over three years Calculate investment income on surplus funds Calculate borrowing cost to be capitalized over three years Calculate cost of qualifying assets Company borrowed fund for the construction of manufacturing plant at Multan of Rs. 300 million from ABL bank dated 1-1-2016 for years' period @15% pa. Construction was completed on 30 June 2017. Surplus funds were invested @10% pa. Payment Schedule 1st January 1st April 1st July 1st October Required i. ii. iii. iv. 2016 40 50 60 80 230 2017 20 50 70 2018 Calculate total interest over three years Calculate investment income on surplus funds Calculate borrowing cost to be capitalized over three years Calculate cost of qualifying assets

Answer rating: 100% (QA)

To calculate the total interest over three years we need to sum up the interest payments made each y... View the full answer