How much is capitalizable borrowing cost for ubiquitous co

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Reference no: EM132817683

Problem 1: UBIQUITOUS WIDESPREAD Co. started construction of a new office building on January 1, 20x1. Funds borrowed specifically for the construction the building is ?8,000,000 accruing interest at 10% annually. However, a part of the borrowing is used for other business requirements during the year. Investment income earned on temporary investments of proceeds from the borrowing amounted to ?48,000 which was received in cash on September 1, 20x1. Expenditures on the building amounted ?7,200,000 which was incurred evenly during the year. How much is the capitalizable borrowing cost?

a. 358,400

b. 324,800

c. 289,600

d. 0

Reference no: EM132817683

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