LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

SOLUTION OF IPCC ADVANCED ACCOUNTING SOLUTION MAY 2010 (PAPER-5)

S.Srikanth (Cost Accountant ) (346 Points)

04 June 2010

MAY 2010 IPCC Group 2 ADVANCED ACCOUNTING SOLUTION(PAPER-5)

Reply
Follow
Share

7 Replies

Keval Shah (CA-Final) (306 Points)
Replied 04 June 2010

thanks

sohan (PURSUING CA) (103 Points)
Replied 04 June 2010

thanx a lot friend.

Deepak Joshi (Chartered Accountant) (84 Points)
Replied 18 June 2010

Originally posted by : S.Srikanth
	MAY 2010 IPCC Group 2 ADVANCED ACCOUNTING SOLUTION(PAPER-5)

Solution 1(iii) As per AS 16- "Borrowing Costs", borrowing costs that are directly attributable to acquision, constrution or production of qualifying assets should be capitalised as part of cost the Capital Assets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

Rat of interest 65/500= 13%

Qualifying assest : Rs 320 Lacs (cost of plant and machinery) + Rs 50 Lacs (advances to suppliers of capital assets) = Rs 370 lacs , 13% thereof Rs 48.10 Lacs interest, will be capitalised and balance 65-48.10 = Rs 16.90 lacs will be charged as revenue expenditure to P&L Account