On Nov 1, 2008 the company borrowed Rs. 4,000,000 at 24% to finance construction of the plant.
Repayment of loan will start a month after completion of project.
During the year ended Oct.31, 2009, expenditure on the building was Rs.3, 000,000. The expenditure was incurred evenly through the year.
What amount of interest should be capitalized in year ended Oct, 31 2009?
Net profit for year ended December 31,2007
Rs.
1,300
weighted average number of ordinary shares outstanding during 2007
200 shares
Average value of one ordinary share during year 2007
Rs.
25
Weighted average number of share under option during 2007
80 shares
Exercise price for shares under option during year 2007
Rs.
20
Five years ago, Hassan Ltd acquired the following shares in Pervaiz Ltd:
Rupees
75,000 Ordinary shares of Rs. 1 --- cost 93,100
15,000 6% Preferred shares of Rs. 1 --- cost 16,050
109,150
At the date of acquisition, the retained earnings of Pervaiz Ltd amounted to Rs. 11,000. The summarized balance sheets of the two companies at 31 December 2008 were as follows:
Hassan Ltd
(Rupees)
Pervaiz Ltd
(Rupees)
Ordinary Shares of Rs. 1
350,000
100,000
6% Preferred Shares of Rs. 1
----
60,000
Reserves
348,420
132,700
Sundry payables
93,400
51,150
791,820
343,850
Tangible Non- Current assets
431,100
219,350
Investments
109,150
----
Inventory
143,070
71,120
Receivables
89,200
36,230
Cash at Bank
19,300
17,150
791,820
343,850
During the year Hassan Ltd sold goods whose invoice value was Rs. 24,000 to Pervaiz Ltd. These goods were invoiced at cost plus 25%, and one-quarter were still in Pervaiz’s inventory at the year end.
Required:
Prepare the consolidated balance sheet of Hassan Ltd as at 31 December 2008