Borrowing Cost
Aurora lid recentiy stirted the conserastion of a new gold inine The compony expece consuruction facilitier at one of irs existing mines, which sexpected to tike wa months Select the one correct option and then click Submit. Only the upgrade can be classified as a qualifying asset. Only the new mine can be classified as a qualifyling asset. It depends on the entitys accounting policy for borrow costs. The new mine, as well as the upgrade, can be classified as qualifying assets. Acable company is buiding a cablenetworkcovering mary iranchise areas. The construction is carried butsequentially foreach of the areas. Onee the construction is completed in each franchise area, the borrowings When should the capitalization ofbotrowing casticease for an ndividusifranthise area Select the one correct option and then click Submit. When no further finance resources are available At the completion of that individual franchise area At the completion of substantiaily all of the franchise areas At the end of the entire project Howait Lte is constructing numerous queliying assecs Constructon ona porticular qualifyingasset started on 1 May 2018. lis yeurend 1 Howat has made the following general borrowings A general loan of 550,000 0n 1 january 2018 at 4 peccent per annum - Debentures of $200000 issued an 1 Aprilizo18 at 5 percentiper onnum What is the welghted average capitalization rate used for capitalizanion of borrowing costs? (ignore the effect of compounding in calculating interest for simplicity) Select the one correct option ond then click Submit. 4 percent 4.5 percent 4.75 percent 5 percent Sunshine Vacations is building a new cruise liner that will toles ar least threeyears to complete feact the following information, and then selectethe correctstitementsitom the list below. - On 1 January 2015 engineers started drawings for the crusefirex - On 1 july 2015 , prototype scale macies were buits to identifythe best dedgo. - On 1January 2016, construction of checruseliner started Select the one correct option and then click Submit. Capitalization of borrowing costs would start on 1 January 2018. Capitalization of borrowing costs would start on 1 july 2018. Capitalization of borrowing costs wouldhtart on 1 january 2019. Engineer drawing is not considered an activity necessary to prepare the asset for its intended use under IAS 23. After completing construction of the cruise liner on 1 January 2015 , 5 unshine Vacationis progress to completion is as followst - On 31 December 2018 , constructionipf the cruise liner s completed and itis ready to set sail However: the name still needs to be painted on the cruiseliner and the rooms must be equipped with linent and cutery On 31 January 2019, ali the finishing touches (e- color painting) are compteted and the ship undertakes her maiden voyage The all the acthities necessary to prepare the crisse iner for her intended useare Capitalization of the bonrowing costs on the cruseliner would, thereforestop on Select and drag the correct option into each blank and then click Submit. On 1 May 2018, Gamma Led borrowed USs1 milion fo finkince the constrecton of a produatipn hath of the rate of 5 percent perannum. The construction starked on 1 fine 2018. The entity temporarily invested USS800,000 in short-term bankdeposits for two inonths at ehe rate of 2 percent, What amount af borrowing cost can be capitalized during 20tb? Select the one correct option and then Submit. $2,667 $26,500 $29,167 $31,834 Over the past two years, Milano Company has developed a computer software to be used internally and/or to be sold to prospective buyers In accordance with uas sa, the group capiralized the development costs incurred during the development phase and recognized an intangible asset of et milition. If Milano Compary borrows funds for the purpose of funding such soliware developmeti, should it capitalize botrowing costs as part of the catrying amount of the inter nally generated intangible asset? Select the one correct option and then click Submit. Yes, because intangible assets that take a substantial period of time to build are qualifying assets. No, because only acquired tangible assets can be qualifying assets. No, because IAS 23.7 states that intangible assets are not qualifying assets. It depends on whether the computer software is to be used internally or sold to prospective buyers. Delta Force Ltd borrowed USS1 million to finance the construction of ar airplane The nist progress payment madeto d contractor is for only part of that ambunt oorrowed, and the remaining orngunt was invested in shorcterm bank deposits until the next payment duc How do we determine the barrowng cost to be capitaliza? Select the one correct option and then click Submit. The borrowing cost to be capitalized is the actual borrowing cost incurred on US51 million borrowing. The borrowing cost to be capitalized is the actual borrowing cost incurred on the first progress payment only. The borrowing cost to be capitalized is the deemed borrowing cost in respect of the expenditure on all qualifying assets. The borrowing cost to be capitalized is the actual borrowing cost incurred less interest income from the temporary investment. US515,000, 1 May 2018 US520,000, and I October 2013 US55,000. The constructon of the asset was completed on 31 December 2018. However during the accounting period BetaGd Ltal has invested the excess funds at an interest rate of 9 percentin short term bank deposirs What is the borrowing cost eligible for capital zation7 Select the one correct option and then click submit. U5$912.50 US\$2,850 US\$3,287.50 US\$40,000
