On 1 January 2016, Carkey Copy Bhd had managed to accumulate finances amounting to RM200 million to finance their plant in Senawang, and its general administrative operation. The following are the details on the outstanding horrowings and their coTesponding costs for the year ended 31 December 2016: Amount borrowed RMM 000 50,000 110,000 40,000 200,000 Rate of interest Term loan Loan stock Redeemable preference shares Total RMM'000 5,000 13,200 2.400 10 12 During 2016, the company had utilised RM50 million of the borrowed funds to develop the plant. The construction of the plant commenced on 1 January 2016, and completed on 30 June 2017. In line with MFRS 123 Borrowing costs, borrowing costs on qualifying assets were to be capitalised. Required Definequalifying assets, in accordance with MFRS 123 Borrowing Costs AND state (2 marks) Compute the capitalisation rate AND the amount of borrowing costs that qualify for the (5 marks) (a) whether the manufacturing plant of Carkey Bhd. is a qualifying asset (b) capitalisation for the financial year 2016 and 2017 (c) Advise the management of Carkey Bhd on how to record the borrowing costs associated with the construction of the company's manufacturing plant, in accordance with MFRS 123 Borrowing Costs. 3 marks) (d) Show the amount of borrowing costs that would be charged as an 'expensc in the company's statement of comprehensive income for the year ended 31 December 2016 (2 marks) (e) Carkey Bhd had invested any surplus from the loan funds that were yet to be utilised in other investments. The interestsincome carned from the temporary investments of the term loan funds were as follows: UNTING AND R EFORTING2 EISTER 1 201N 2019 Investment period Interest income 1 October 2015 to 31 December 2015 1 January 2016 to 31 December 2016 1 January 2017 to 30 June 2017 RM 200,000 600,000 30,000 Taking into account the above incomes, determine the total amount of borrowing costs that would be capitalised for 2016 and 2017 (5 marks) () Show an extract of Profit or Loss & Other Comprehensive Income, and Statement of Financial Position of Carkey Bhd to incorporate the above transactions for the year 2016 and 2017 (3 marks) On 1 January 2016, Carkey Copy Bhd had managed to accumulate finances amounting to RM200 million to finance their plant in Senawang, and its general administrative operation. The following are the details on the outstanding horrowings and their coTesponding costs for the year ended 31 December 2016: Amount borrowed RMM 000 50,000 110,000 40,000 200,000 Rate of interest Term loan Loan stock Redeemable preference shares Total RMM'000 5,000 13,200 2.400 10 12 During 2016, the company had utilised RM50 million of the borrowed funds to develop the plant. The construction of the plant commenced on 1 January 2016, and completed on 30 June 2017. In line with MFRS 123 Borrowing costs, borrowing costs on qualifying assets were to be capitalised. Required Definequalifying assets, in accordance with MFRS 123 Borrowing Costs AND state (2 marks) Compute the capitalisation rate AND the amount of borrowing costs that qualify for the (5 marks) (a) whether the manufacturing plant of Carkey Bhd. is a qualifying asset (b) capitalisation for the financial year 2016 and 2017 (c) Advise the management of Carkey Bhd on how to record the borrowing costs associated with the construction of the company's manufacturing plant, in accordance with MFRS 123 Borrowing Costs. 3 marks) (d) Show the amount of borrowing costs that would be charged as an 'expensc in the company's statement of comprehensive income for the year ended 31 December 2016 (2 marks) (e) Carkey Bhd had invested any surplus from the loan funds that were yet to be utilised in other investments. The interestsincome carned from the temporary investments of the term loan funds were as follows: UNTING AND R EFORTING2 EISTER 1 201N 2019 Investment period Interest income 1 October 2015 to 31 December 2015 1 January 2016 to 31 December 2016 1 January 2017 to 30 June 2017 RM 200,000 600,000 30,000 Taking into account the above incomes, determine the total amount of borrowing costs that would be capitalised for 2016 and 2017 (5 marks) () Show an extract of Profit or Loss & Other Comprehensive Income, and Statement of Financial Position of Carkey Bhd to incorporate the above transactions for the year 2016 and 2017
