Answers
| 2021 | 2022 | |||||
| Interest Capitalized | $ 4,53,000 | $ 5,67,411 | ||||
| Interest Expense | $ 9,67,000 | $ 8,52,589 | ||||
| Cost of Building | = | $ 87,50,411 | ||||
| Workings: | ||||||
| Expenditure for 2021 | ||||||
| Jan 1,2021 | $ 16,80,000 | X | 12/12 | = | $ 16,80,000 | |
| March 1, 2021 | $ 12,60,000 | X | 10/12 | = | $ 10,50,000 | |
| June 30, 2021 | $ 14,60,000 | X | 6/12 | = | $ 7,30,000 | |
| October 1, 2021 | $ 12,60,000 | X | 3/12 | = | $ 3,15,000 | |
| $ 56,60,000 | $ 37,75,000 | |||||
| Interest Capitalized in 2021 | ||||||
| $ 37,75,000 | X | 12.00% | = | $ 4,53,000 | ||
| Expenditure for 2022 | ||||||
| Jan 1, 2022 ($5660000+$453000) | $ 61,13,000 | X | 9/9 | = | $ 61,13,000 | |
| Jan 31, 2022 | $ 3,69,000 | X | 8/9 | = | $ 3,28,000 | |
| April 30, 2022 | $ 7,02,000 | X | 5/9 | = | $ 3,90,000 | |
| August 31. 2022 | $ 9,99,000 | X | 1/9 | = | $ 1,11,000 | |
| $ 81,83,000 | $ 69,42,000 | |||||
| Interest Capitalized in 2020 | ||||||
| $ 69,42,000 | ||||||
| Less: | $ 40,00,000 | X | 12.00% | X 9/12 | = | $ 3,60,000 |
| $ 29,42,000 | X | 9.40% | X 9/12 | = | $ 2,07,411 | |
| Interest Capitalized in 2020 | = | $ 5,67,411 | ||||
| Weighted Average rate of all debt:- | ||||||
| $ 30,00,000 | X | 8% | = | $ 2,40,000 | ||
| $ 70,00,000 | X | 10% | = | $ 7,00,000 | ||
| $ 1,00,00,000 | $ 9,40,000 | |||||
| Weighted Average rate of all debt = | 9.40% | |||||
| ($940000/ 100,00,000) | ||||||
| Interest Expense for 2021: | ||||||
| Total Interest Incurred | ($4000000*12%)+($3000000*8%)+($7000000*10%) | = | $ 14,20,000 | |||
| Less : Interest Capitalized | = | $ 4,53,000 | ||||
| 2021 Expense | = | $ 9,67,000 | ||||
| Interest Expense for 2022: | ||||||
| Total Interest Incurred | = | $ 14,20,000 | ||||
| Less : Interest Capitalized | = | $ 5,67,411 | ||||
| 2022 Expense | = | $ 8,52,589 | ||||
| Cost of Building | ||||||
| Expenditure for 2021 | = | $ 56,60,000 | ||||
| Interest Capitalized in 2021 | = | $ 4,53,000 | ||||
| Expenditure for 2022 | = | $ 20,70,000 | ||||
| Interest Capitalized in 2022 | = | $ 5,67,411 | ||||
| Cost of Building | = | $ 87,50,411 | ||||
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