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Question 2 (a) MODERNA BHD constructed a building on 1 January 2020. The building was completed on 31 December 2020. The useful life of the
Question 2 (a) MODERNA BHD constructed a building on 1 January 2020. The building was completed on 31 December 2020. The useful life of the building was estimated to be 50 years. Construction costs (excluding interest) incurred on the building was RM1.5 million. MODERNA BHD secured a loan of RM1 million from Diamonds Financing Bhd on 1 January 2020 to finance the construction costs. Interest on the loan was charged at 6% per annum. Since MODERNA BHD did not need the full amount for the loan in the first quarter of the construction, it deposited RM400,000 in a fixed deposit which yielded an interest of 2.5% per annum. Required: i. Compute total borrowing costs to be capitalized for construction of the building. (8 marks) ii. Compute total costs of the building
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