[TryingCPA]

@AccountingStar My lecturer gave it to us. I’m not sure where she got it from.

[TryingCPA]

Thank you!

One more thing, in the SoFP, should I add the accrued interest as a current liability? $6,666,667 for 2017 and $26,666,667 for 2018?
Also, should we calculate borrowing cost from when the loan is received or when construction commences?

[TryingCPA]

Hello,

Will the capitalized interest be in the SoFP as accrued interest (current liabilities) along with the amount in the SoCI?

Thank you

[TryingCPA]

Hi again,

Ok, so far I got $510 mil for the value of the asset (direct labour + direct materials + 50% overhead + capitalized borrowing cost).
So for 2017, interest incurred for Mar 1 – Dec 31 is $16,666,667 and for Apr 1 – Sep 30 (capitalization period) is $10,000,000.
Depreciation for Sep 30 – Dec 31 is $2,550,000.
The finance cost is $6,666,667, the overhead expense is $100 mil and the carrying value is $507.45 mil. Loan value remains at $250 mil.

As for 2018, interest incurred (finance cost) is $20,000,000 and depreciation is $10,200,000.
Accumulated depreciation is $12.75 mil and carrying value is $497.25 mil

I’m wondering if the interest is to be repaid in a single installment has any effect. We would still accrue yearly and should the other 50% of overhead cost be added?

Thank You

[TryingCPA]

I’m going to give it another attempt first and then I’ll send what I have.

Mel

[TryingCPA]

Hello,
I’m having difficulties attempting this question.

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