F7 Chapter 17 Questions
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why is it capitalised over the period of 10 months when construction began in june
i mean question 2
can anyone help me with question 4 because it find it pretty weird because in the start it said like 43m have not yet capitilized in accordance with ias then why is that a answer when its not okay to capitilize it according to ias ???
capitalized *
Could you maybe explain why in question 4 the 43m should be capitalised?
i have no idea….. im also confused xD
The line in the question “$43 million have not yet been capitalised in accordance with accounting standards” is capable of either of two diametrically opposite interpretations
1) the $43 million is not capitalised and that is the correct treatment in accordance with accounting standards
2) the $43 million has not been capitalised but it should have been capitalised in accordance with accounting standards
It’s a matter of where you put the emphasis of the phrase ‘in accordance with accounting standards’
Hi,
For question 1, why multiply 9/12??? why not 4/12 since the 6m is borrowed from April – July?
Cheers.
Did Tripoli repay the $6 million at the end of July?
Can you explain in Q1 how compute 15/39 & 24/39 ?
How much money has Tripoli borrowed? $39 million
Of that amount $15 million relates to one loan on agreed terms and $24 million relates to a second loan on different agreed terms
Ok now?
Hi Sir,
Regarding Q2, how should we calculate the months for investment income? Should we start from the loan drawn (1 may) or from the work commenced?
From the date that we start to capitalise the borrowing costs – so that would be 1 July until 1 November = 4 months
Problem in Question 1 and Question 3…
Please assist in that.
Tell me the problem, then I can explain it
Question 1) Why 6m & 2m is multiplied by 15/39 and 24/39? and with the interest rates as well?
Question 3) Its same as above..
My question is why secured loans are being multiplied with the extra borrowings?
help me with q1 the calculations of the borrowing costs to be reconigsed
I think you should read more at F7 text in page 52
First, we need to caculate the capitalisation rate = weighted average rate = 9%x15/39 + 11%x24/39 = 10,23%
Borrowing costs = (6mx9/12 + 2mx5/12)x10,23% = $545,641
please sir can you tell me how to do question 1 and 3 ?
i will be thankful
for question 3
first u calculate weighted average cost of borrowings {(300/300+450) * 8%} + {(450/300+450) *9%} =8.6%
then u put the date the loan was taken;
01 Mar 2014- 31 Oct 2014= 8 months
01 Sept 2014- 31 Oct 2014= 1 month
then,
60m * 8.6% * 8/12= 3.44
20m * 8.6% * 1/12= 0.143
Total = 3.583
That does it!
Please can someone help me out in Q2. I solved thus:
1.4mx8%x10/12=93,333
1m x8%x 6/12=40,000
Less
1m x 6% x 4/12
I know something must be wrong but I can’t indicate it exactly
Try this:
$2.4m @ 8% x 10/12 160,000
$1.0m @ 6% x 4/12 ( 20,000)
Answer $140,000
And problems, post them on Ask ACCA Tutor – that way I’ll be sure to see them
Sir,
Out of 2.4m, 1m is invested only in November. So aren’t we suppose to provide interest for 6 months for 1m and 10 months for 1.4m?
I’ve just answered this on the Ask ACCA Tutor forum for F7
V Good , thanks