Shark Tank plc used general funds to finance the construction of non-current assets. The general funds comprised the following: 9% £60,000 loan 8% £40,000 loan On 1 April 2019, SharkTank plc paid £20,000 to commence the production of a qualifying asset and a further £30,000 on 30 June 2019 to continue with the production. The asset was still being constructed at the end of the year. How much interest should be capitalised for this qualifying asset or the year ended 31 December 2019 (do not round up any f your working - use the exact interest rate)?

Shark Tank plc used general funds to finance the construction of non-current assets. The general funds comprised the following: 9% £60,000 loan 8% £40,000 loan On 1 April 2019, SharkTank plc paid £20,000 to commence the production of a qualifying asset and a further £30,000 on 30 June 2019 to continue with the production. The asset was still being constructed at the end of the year. How much interest should be capitalised for this qualifying asset or the year ended 31 December 2019 (do not round up any f your working - use the exact interest rate)?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 18E

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