• Company X PLC has the following general borrowings outstanding throughout the year to 30th June 2019 (company’s financial year end): 
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• (i) £600,000 bank loan with 7.5% interest rate;
•  (ii) £300,000 bank loan with 9% interest rate; and 
• (iii) £1,000,000 bank loan with 8.5% interest rate. 
• On 1st October 2018, the company began construction of a qualifying asset and incurred expenditure of £150,000 using the existing general borrowings. A further £120,000 was also spent on 1st of February 2019 from the existing general borrowings. 
• You are required to calculate the amount of borrowing costs that should be capitalised as part of the qualifying asset during the financial year ending 30th June 2019.

Answer rating: 100% (QA)

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