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Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company’s general borrowings for the year:     £m 10% loan repayable 20X9 25  8% loan repayable 20Y2 75   Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £4.5 million on that date to fund construction. On 1 September 20X8 an additional £6 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. a. £850,000 b. £425,000 c. £305,625 d. £892,500 e. £541,875 f. £500,000

Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company’s general borrowings for the year:     £m 10% loan repayable 20X9 25  8% loan repayable 20Y2 75   Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £4.5 million on that date to fund construction. On 1 September 20X8 an additional £6 million was withdrawn for the same purpose. Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8. a. £850,000 b. £425,000 c. £305,625 d. £892,500 e. £541,875 f. £500,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the company’s general borrowings for the year:

 

 

£m

10% loan repayable 20X9

25

 8% loan repayable 20Y2

75

 

Horizons plc began construction of a qualifying asset on 1 May 20X8 and withdrew funds of £4.5 million on that date to fund construction. On 1 September 20X8 an additional £6 million was withdrawn for the same purpose.

Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8.

a.

£850,000

b.
£425,000
c.
£305,625
d.
£892,500
e.
£541,875
f.
£500,000
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