QUESTION 4 (9 marks) Skyprops Limited is a company with a December financial year-end. Due to the rapid growth that the company is experiencing, they will require bigger office space soon. Therefore, the directors approved constructing a new office building on land that the company purchased a few years back. They started constructing the new office building on 1 February 2020, and they estimate that the construction will take place over 14 months. Expenditure in respect of the office building construction, which was financed through borrowings, was incurred evenly during each of the following months: Rand 295 000 405 000 350 000 February 2020 March 2020 August 2020 September 2020 October 2020 November 2020 December 2020 1 200 000 2 300 000 520 000 425 000 On 1 January 2020, the company obtained a bank loan of R700 000, which was obtained explicitly for the office building's construction. The initial construction costs were primarily financed through the bank loan. The loan was acquired at an interest rate of 12,25% per annum. Due to the COVID-19 pandemic and the restrictions implemented, active development ceased on 31 March 2020. Construction only started again on 1 August 2020. Skyprops Limited decided to place the funds received from the bank loan in an investment account. The interest earned on these funds during the construction period amounted to R15 021. The rest of the construction costs were financed through general borrowings, and a capitalisation rate of 12% per annum was applicable. 9 HFAC334-1-JUL-DEC2021-SA1-CP-V3-28052021 REQUIRED: Assuming that Skyprops Limited capitalises borrowing costs annually for accounting purposes, calculate the total borrowing costs that may be capitalised for the year ending 31 December 2020. Round all answers to the nearest Rand. (9 marks)