Problem XYZ Ltd., has undertaken a project for expansion of capacity as per the following 1.17 details: Month Plan Actual Rs. Rs. April, 2002 2,00,000 2,00,000 May, 2002 2,00,000 3,00,000 June, 2002 10,00,000 July, 2002 1,00,000 August, 2002 2,00,000 1,00,000 September, 2002 5,00,000 7,00,000 932 The company pays to its bankers at the rate of 12% p.a., interest being debited on a monthly basis. During the half year company had Rs. 10 lakh overdraft up to 31st July, surplus cash in August and again overdraft of over Rs. 10 lakh from 1.9.2002. The company had a strike during June and hence could not continue the work during June. Work was again commenced on 1st July and all the works were com- pleted on 30th September. Assume the expenditure were incurred on 1st day of each month. Calculate: () Interest to be capitalised. (ii) Give reasons wherever necessary. Assume: (a) Overdraft will be less, if there is no capital expenditure. (b) The Board of Directors based on facts and circumstances of the case has decided that any capital expenditure taking more than 3 months as substantial period of time