Chapter 5_Homeworks | Tài liệu Tiếng Anh

Problem 1

Columbia commenced the construction of an item of property, plant, and equipment on 1 March 20X5 and funded it with a $10 million loan. The rate of interest on the borrowings was 5%.

Due to a strike no construction took place between 1 October and 1 November.

Required

Calculate the amount of interest to be capitalised as par to of non-current assets if Columbia’s reporting date is 31 December 2015.

Problem 2

Venezuela had the following bank loans in issue during 20X5.

4% bank loan $25m

3% bank loan $40m

Venezuela commenced the construction of an item of property, plant, and equipment on 1 January 20X5 for which it used its existing borrowings. $10 million of expenditure was used on 1 January and $15 million was used on 1 July.

Required

Calculate the amount of interest to be capitalised as part of the non-current assets during 20X5 (year end: 31/12/20X5).

Problem 3

Carriageways Co had the following bank loans outstanding during the whole of 20X8 which form the company's general borrowings for the year:

9% bank loan $15m

11% bank loan $24m

Carriageways Co began construction of a qualifying asset on 1 April 20X8 and withdrew funds of $6 million on that date to fund the construction. On 1 August 20X8, an additional $2 million was withdrawn for the same purpose.

Required

Calculate the borrowing costs which can be capitalised in respect of this project for the year ended 31 December 20X8.

Problem 4

Leclerc Co has borrowed $2.4 million to finance the building of a factory. Construction is expected to take two years. The loan was drawn down on 1 January 20X9, and work began on 1 March 20X9. $1 million of the loan was not utilised until 1 July 20X9 so Leclerc was able to invest it until needed.

Leclerc Co is paying 8% on the loan and can invest surplus funds at 6%.

Required

Calculate the borrowing costs to be capitalised for the year ended 31 December 20X9 in respect of this project.

Problem 5

On 1 October 20X1, Manchester Co obtains four sources of debts:

1. 10% 800,000 debts used specifically to finance the construction of assembly line B.
2. 9% 700,000 short term loans.
3. 8% 500,000 convertible debts.
4. 5% 500,000 preferences share capital.

Among these debts, short term loans, convertible debts, and preferences share capital are used to finance the construction of a new assembly line A in its factory. The construction commenced on 1 November 20X1, but no construction took place between 1 December 20X1 to 1 March 20X2 due to employees taking industrial action. Expenditure amounting to $1m was incurred on 1 November and a further $1.2m on 1 March.

The assembly line A was available for production on 31 July 20X2 having a construction cost of $2.2m and a useful life of five years.

Required

Calculate the carrying amount of the asset on 30 September 20X2 and the total expense recognised in profit or loss for the year ended 30 September 20X2.