Question: 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

On 1 January 20x2, ABC Bhd. has three bank loans to finance

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 edRMI 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.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

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 full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

A policymaker is deciding how to finance the construction of a new airport. He can either-pay for it by increasing citizens taxes or by-printing more money. What are some of the short-run and...

A company borrowed $180,000 at an interest rate of 9% compounded annually over six years. The loan will be repaid in installments at the end of each year according to the accompanying repayment...

For how many months, at an interest rate of 1% per month, does money have to be invested before it will double in value?

The Dayco Manufacturing Company had the following financial statement results for last year. Net sales were $1.2 million with net income of $90,000. Total assets at year end amounted to $900,000. a....

Manufacturers Bank is evaluating Aluminum Industries, Inc., which has requested a $3 million loan. On the basis of the debt ratios for Aluminum, along with the industry averages and Aluminums recent...

Kelvin Aerospace, Inc., manufactures parts such as rudder hinges for the aerospace industry. The company uses a job-order costing system with a predetermined plantwide overhead rate based on direct...

John Dough has just been awarded his degree in business. He has three education loans outstanding. They all mature in 5 years and can be repaid without penalty any time before maturity. The amounts...

Sharpton Fabricators Corporation manufactures a variety of parts for the automotive industry. The company uses a job-order costing system with a plantwide predetermined overhead rate based on direct...

Lee OBrien is the president and majority shareholder of Fluff N Stuff, Inc., a small retail store chain. Recently, OBrien submitted a loan application for Fluff N Stuff, Inc., to Montvale National...

The following trial balance has been extracted from the books of Keith Ltd as at 30 June 2011: Additional information: 1 Stock at 30 June 2011 valued at cost amounted to 155,000. 2 Depreciation is to...

Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2024 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit...

Designing the Distribution Network for Michaels Hardware Ellen Lin, vice president of supply chain at Michaels Hardware, was looking at the financial results from the past quarter and thought that...

In which of the following situations would you need to use the SALUTE service recovery model? Veterans call your clinic and are dissatisfied with their experiences at the VA. Fellow employees come to...

Joanna is going through the calculations for estimating how much longer it will take her agile team to finish the project. What must she remember to do as she performs the calculations? Select an...

Question 5: Determine the resulting spring rate for the given arrangement of disc springs if the spring rate for a single disc is c! (4 points)

You are a contracting officer for a groundskeeping services contract with a base year period of performance and three, one - year option periods. The total contract value is $ 8 5 5 , 0 0 0 . The...

Consider a perfectly competitive industry with n firms. Assume the demand curve is linear, i.e. P=a-bQ, where P is the price and Q is the aggregate quantity. Assume each firm has a quadratic cost...

Express these numbers in standard notation. a. 2.87 10-8 b. 1.78 1011 c. 1.381 10-23

What is the return on the residual class for prepayment rates of 15 percent, 20 percent, 25 percent, and 30 percent?

What are the primary benefits of investing in real estate income property?

What is a mortgage swap certificate?

Vitamin D, whether ingested as a dietary supplement or produced naturally when sunlight falls on the skin, is essential for strong, healthy bones. The bone disease rickets was largely eliminated in...

A TV news reporter says that a proposed constitutional amendment is likely to win approval in the upcoming election because a poll of 1505 likely voters indicated that 52% would vote in favor. The...

Some food retailers propose subjecting food to a low level of radiation in order to improve safety, but sale of such "irradiated" food is opposed by many people. Suppose a grocer wants to find out...