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On 1 January 2022, Apex Co borrowed 10,000,000 to construct 3 assets Hill, Bill and Pill. The following amounts were utilized during the year, while the remaining fund was invested temporarily. The loan rate was 5% per annum, and Apex can temporarily reinvest the surplus at 3% per annum. Hill Bill (BD) 2,000,000 January 1, 2022 July 1, 2022 September 1, 2022 (BD 1,000,000 2,000,000 3,000,000 Pill (BD) 500,000 1,500,000 Required: Calculate the borrowing costs that may be capitalised for each asset and the cost of Hill, Bill and Pill assets as at 31 December 2022. (ignore the compounding effect of the interest and round off your answers to the nearest BD).

On 1 January 2022, Apex Co borrowed 10,000,000 to construct 3 assets Hill, Bill and Pill. The following amounts were utilized during the year, while the remaining fund was invested temporarily. The loan rate was 5% per annum, and Apex can temporarily reinvest the surplus at 3% per annum. Hill Bill (BD) 2,000,000 January 1, 2022 July 1, 2022 September 1, 2022 (BD 1,000,000 2,000,000 3,000,000 Pill (BD) 500,000 1,500,000 Required: Calculate the borrowing costs that may be capitalised for each asset and the cost of Hill, Bill and Pill assets as at 31 December 2022. (ignore the compounding effect of the interest and round off your answers to the nearest BD).

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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On 1 January 2022, Apex Co borrowed 10,000,000 to construct 3 assets Hill, Bill and Pill. The following amounts were utilized during the year, while the remaining fund was invested temporarily. The loan rate was 5% per annum, and Apex can temporarily reinvest the surplus at 3% per annum. Hill Bill (BD) 2,000,000 January 1, 2022 July 1, 2022 September 1, 2022 (BD 1,000,000 2,000,000 3,000,000 Pill (BD) 500,000 1,500,000 Required: Calculate the borrowing costs that may be capitalised for each asset and the cost of Hill, Bill and Pill assets as at 31 December 2022. (ignore the compounding effect of the interest and round off your answers to the nearest BD).
Transcribed Image Text:On 1 January 2022, Apex Co borrowed 10,000,000 to construct 3 assets Hill, Bill and Pill. The following amounts were utilized during the year, while the remaining fund was invested temporarily. The loan rate was 5% per annum, and Apex can temporarily reinvest the surplus at 3% per annum. Hill Bill (BD) 2,000,000 January 1, 2022 July 1, 2022 September 1, 2022 (BD 1,000,000 2,000,000 3,000,000 Pill (BD) 500,000 1,500,000 Required: Calculate the borrowing costs that may be capitalised for each asset and the cost of Hill, Bill and Pill assets as at 31 December 2022. (ignore the compounding effect of the interest and round off your answers to the nearest BD).
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