Shark Tank plc used general funds to finance the construction of non-current assets. The general funds comprised the following: 9% £60,000 loan 8% £40,000 loan On 1 April 2019, SharkTank plc paid £20,000 to commence the production of a qualifying asset and a further £30,000 on 30 June 2019 to continue with the production. The asset was still being constructed at the end of the year. How much interest should be capitalised for this qualifying asset or the year ended 31 December 2019 (do not round up any f your working - use the exact interest rate)?

Shark Tank plc used general funds to finance the construction of non-current assets. The general funds comprised the following: 9% £60,000 loan 8% £40,000 loan On 1 April 2019, SharkTank plc paid £20,000 to commence the production of a qualifying asset and a further £30,000 on 30 June 2019 to continue with the production. The asset was still being constructed at the end of the year. How much interest should be capitalised for this qualifying asset or the year ended 31 December 2019 (do not round up any f your working - use the exact interest rate)?

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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