Solution-Calculate the other income and borrowing cost

Calculate the other income and borrowing cost expensed

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Question - On 1 January 20X1, RM500 000 was borrowed by Tera Bhd at 15% p.a. to finance the construction of a qualifying asset. Construction commenced on 1 March 20X1 and expenditure was incurred at RM40 000 per month from March to December inclusive. Interest on investments at short call were as follows:

	January to February 20X1 (RM)	March to December 20X1 (RM)
Surplus funds relating to RM500,000 borrowed	8,000	24,000
Other surplus funds	3,000	20,000
	11,000	44,000

Required -

1. State the requirement for interest on loan to be capitalized?

2. Calculate the amount of borrowing costs that may be capitalised the specific loan for the year ended 31 December 20X1.

3. Calculate the other income and borrowing cost expensed from specific loan and other funds for the year ended 31 December 20X1.

Reference no: EM133087649

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Calculate the other income and borrowing cost expensed

Reference no: EM133087649

Reference no: EM133087649

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