FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question
100%
Please do not rely too much on chatgpt, because its answer may be wrong. Please consider it carefully and give your own answer. You can borrow ideas from gpt, but please do not believe its answer.Very very grateful!Please do not rely too much on chatgpt, because its answer may be wrong. Please consider it carefully and give your own answer. You can borrow ideas from gpt, but please do not believe its answer.Very very grateful!
Company X PLC has the following general borrowings outstanding throughout the year to 30th June
2019 (company's financial year end):
(i) £500,000 bank loan with 5.5% Interest rate;
(ii) £450,000 bank loan with 7% interest rate;
(iii) £700,000 bank loan with 9.5% interest rate; and
(iv) £350,000 bank loan with 10% interest rate.
On 1st October 2018, the company began construction of a qualifying asset and incurred expenditure
of £200,000. A further £300,000 was also spent on 1st of February 2019.
Finally, a last expenditure of £150,000 was spent on 1st April 2019. All three expenditures were made
by using the existing general borrowings. You are required to calculate the amount of borrowing
costs that should be capitalised as part of the qualifying asset during the financial year ending 30th
June 2019. In case you are rounding up, please select the closest option to your answer.
In case you are rounding up, please select the closest option to your answer.
O a. £11,260.32
O b. £29,333.15
O c. £17,031.15
O d. £25,078.12
expand button
Transcribed Image Text:Company X PLC has the following general borrowings outstanding throughout the year to 30th June 2019 (company's financial year end): (i) £500,000 bank loan with 5.5% Interest rate; (ii) £450,000 bank loan with 7% interest rate; (iii) £700,000 bank loan with 9.5% interest rate; and (iv) £350,000 bank loan with 10% interest rate. On 1st October 2018, the company began construction of a qualifying asset and incurred expenditure of £200,000. A further £300,000 was also spent on 1st of February 2019. Finally, a last expenditure of £150,000 was spent on 1st April 2019. All three expenditures were made by using the existing general borrowings. You are required to calculate the amount of borrowing costs that should be capitalised as part of the qualifying asset during the financial year ending 30th June 2019. In case you are rounding up, please select the closest option to your answer. In case you are rounding up, please select the closest option to your answer. O a. £11,260.32 O b. £29,333.15 O c. £17,031.15 O d. £25,078.12
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education