Answer to qestion no: 1
Analysis of expenditure | Amonut in ($) | ||
Date | Expenditure | Amount Allocated to Specific Borrowing | Amount Allocated to General Borrowing |
2019 | |||
01.01.2019 | 600,000.00 | 600,000.00 | - |
01.05.2019 | 561,000.00 | 561,000.00 | - |
01.10.2019 | 684,000.00 | 339,000.00 | 345,000.00 |
1,845,000.00 | 1,500,000.00 | 345,000.00 | |
2020 | |||
01.03.2020 | 1,416,000.00 | 1,416,000.00 | |
30.06.2020 | 660,000.00 | 660,000.00 | |
2,076,000.00 | - | 2,076,000.00 | |
Weighted Average Borrowing ROI | |||
Amount Borrowed | Proportionate Share | ROI | Weighted ROI |
13,000,000.00 | 0.68 | 6.00% | 4.11% |
6,000,000.00 | 0.32 | 12.00% | 3.79% |
19,000,000.00 | 1.00 | ||
Weighted Average Rate of Interest on General Borrowing | 7.90% | ||
Borrowing Cost to be Capitalized in 2019 | |||
2019 | |||
Calculation | |||
Specific Borrowing | - | ||
01.01.2019 | 600,000.00 | (600,000x10.00%) | 60,000.00 |
01.05.2019 | 561,000.00 | (561,000x10.00%x8/12) | 37,400.00 |
01.10.2019 | 339,000.00 | (339,000x10.00%x3/12) | 8,475.00 |
General Borrowing | |||
01.10.2019 | 345,000.00 | (345,000x7.90%x3/12) | 6,813.75 |
Total Interest Capitalized | 112,688.75 | ||
Borrowing Cost to be Capitalized in 2020 | |||
2020 | |||
Specific Borrowing (Outstanding As on 01.01.2020) | 1,500,000.00 | (1,500,000x10.00%x6/12) | 75,000.00 |
General Borrowing | - | ||
Outstanding on 01-01-2020 | 345,000.00 | (345,000x7.90%x6/12) | 13,627.50 |
Expend on 01.03.2020 | 1,416,000.00 | (1,416,000x7.90%x4/12) | 37,288.00 |
Expend on 30.06.2020 | 660,000.00 | (660,000x7.90%x0/12) | - |
Total Interest Capitalized | 125,915.50 |
Answer to Question 2.
Depereciation on Complex ( Under Straight Line Method) | |||
(As the Question remain silent about the when the asset is available for use so iit hass been assumed that Complex is available for used from 01-07-2020) | |||
Value Of Complex | |||
Amount Expanded | |||
2019 | |||
01.01.2019 | 600,000.00 | ||
01.05.2019 | 561,000.00 | ||
01.10.2019 | 684,000.00 | ||
2020 | |||
01.03.2020 | 1,416,000.00 | ||
30.06.2020 | 660,000.00 | ||
3,921,000.00 | |||
Interest Capitalised | |||
2019 | 112,688.75 | ||
2020 | 125,915.50 | 238,604.25 | |
Total Value Complex Capitalised | 4,159,604.25 | ||
Less: Residual Value | - | ||
4,159,604.25 | |||
Depreciation (from 01-07-2020 to 31-12-202) | |||
For 6 month under SLM method( Use ful life 25 yrs) | 83,192.09 |
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