Kingston Limited bought an office building on 1 January 2015 for $60,000,000. The useful life of the building was determined to be 40 years with an estimated residual value of $6,000,000. Depreciation is prorated on a monthly basis where relevant. On October 1, 2018 the company decided to rent the building to Portmore Limited for the next five years. At this date the property had a fair market value of $70,000,000. Currently the property is accounted for under IAS16 and after the rental is to be accounted for under IAS40, using the revaluation model. At 31 December 2018 the market value of the property is $72,000,000. a. Prepare Kingston Limited's Statement of Financial Position extract as at December 31, 2018 (5 marks) b. Prepare Kingston Limited's Statement of Comprehensive Income extract for the period ended December 31, 2018. (5 marks) c. Kingston Limited recorded a revaluation gain of $20 million on property accounted for under IAS16 in 2019, a year later a loss on revaluation of $25 million is recorded. How should this be treated in the books of Kingston Limited. (3 marks) Page 4 of 6 PART (B) a) According to IAS 23, Borrowing Costs, certain borrowing costs have to be capitalized. Explain with reference to the above IAS how investment income may be applied to borrowing cost to be capitalized. (4 marks) b) Bogue Construction Limited acquired a loan for $24 million on 1 January 2019 to begin the construction of a bridge. The loan was acquired from National Savings Bank at an effective interest rate of 14%. Construction did not begin on the bridge until, 1 April 2019 and was completed and ready for use on 30 November 2019. The company invested $8m of the funds received from the bank over the period 1 January to 30 June 2019 at an interest rate of 9%. During the month of August 2019 construction on the project was suspended. REQUIRED: For the year ended 31 December 2019 show the following: 1. The Statement of Comprehensive Income Extract for the year (4 marks) 2. The Borrowing cost to be capitalized on the Statement of Financial Position (6 marks)