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).

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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Subject : Accounting
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