Jigjaz Berhad borrowed RM 12 million on 1 January 2017 with the purpose to finance the...

 

Transcribed Image Text:

Jigjaz Berhad borrowed RM 12 million on 1 January 2017 with the purpose to finance the construction work of a machinery, qualifying asset. It is expected that the construction of machinery will take three years to complete, commencing from 1 January 2017. The total expenditure incurred per year were as follows: Date 1 January 2017 1 April 2018 1 July 2019. RM 6,000,000 4,000,000 2,000,000 Interest on the loan was 5% per annum. The company invested the unutilised fund for a return of 3% per annum. Required: Compute the borrowing cost eligible for capitalisation and the cost of the machinery for the years ended 31 December 2017, 31 December 2018 and 31 December 2019. (8 marks) Jigjaz Berhad borrowed RM 12 million on 1 January 2017 with the purpose to finance the construction work of a machinery, qualifying asset. It is expected that the construction of machinery will take three years to complete, commencing from 1 January 2017. The total expenditure incurred per year were as follows: Date 1 January 2017 1 April 2018 1 July 2019. RM 6,000,000 4,000,000 2,000,000 Interest on the loan was 5% per annum. The company invested the unutilised fund for a return of 3% per annum. Required: Compute the borrowing cost eligible for capitalisation and the cost of the machinery for the years ended 31 December 2017, 31 December 2018 and 31 December 2019. (8 marks)