📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!


    Question

    A company borrows ₹100 lakh at 10% interest to

    construct an asset over 2 years. It spends ₹60 lakh in Year 1. What borrowing cost is capitalized in Year 1?
    A ₹12 lakh Correct Answer Incorrect Answer
    B ₹10 lakh Correct Answer Incorrect Answer
    C ₹8 lakh Correct Answer Incorrect Answer
    D ₹5 lakh Correct Answer Incorrect Answer
    E ₹6 lakh Correct Answer Incorrect Answer

    Solution

    Capitalized cost = ₹60 lakh × 10% = ₹6 lakh

    Practice Next
    ask-question