On 1 January 20x2, ABC Bhd. has three bank loans to finance the construction of its...

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On 1 January 20x2, ABC Bhd. has three bank loans to finance the construction of its qualifying assets: A five-year term loan of RM20 million at an interest rate of 5% per annum A seven-year term loan of RM30 million at an interest rate of 6% per annum A ten-year term loan of RM50 million at an interest rate of 7% per annum. As of 31 December 20x2, ABC Bhd. incurred RM10 million in the construction of a factory ed√RMI building and the remaining loans were used to finance its working capital. ABC Bhd. year end is 31 December 20x2. Required: To calculate: a) b) c) the amount of borrowing cost eligible for capitalisation, (1 mark) interest expense to statement of profit or loss. (2 marks) the total amount capitalised for factory building for the period ended 31 December (2 marks) 20x2. On 1 January 20x2, ABC Bhd. has three bank loans to finance the construction of its qualifying assets: A five-year term loan of RM20 million at an interest rate of 5% per annum A seven-year term loan of RM30 million at an interest rate of 6% per annum A ten-year term loan of RM50 million at an interest rate of 7% per annum. As of 31 December 20x2, ABC Bhd. incurred RM10 million in the construction of a factory ed√RMI building and the remaining loans were used to finance its working capital. ABC Bhd. year end is 31 December 20x2. Required: To calculate: a) b) c) the amount of borrowing cost eligible for capitalisation, (1 mark) interest expense to statement of profit or loss. (2 marks) the total amount capitalised for factory building for the period ended 31 December (2 marks) 20x2.

Answer rating: 100% (QA)

Answer Ans a To calculate the borrowing cost eligible for capitalisation we need to determine the weighted average interest rate of the loans and the ... View the full answer