Required: Answer the following questions

1. How should the loan be treated in the F/S^s of Apex for the year-ended 31, March, 2021?

A. P.V                       B. F.V through OCI                  C. F.V through P/L              D. Amortised cost

2. Which two of the statements below regarding IAS # 23’ Borrowing Costs’ are correct?

A. Borrowing costs must be capitalised if they are directly attributable to qualifying assets.

B. Borrowing costs should cease to be capitalised once the related asset is substantially complete.

C. Borrowing costs must be capitalised if they are directly attributable to non‐current assets.

D. Borrowing costs may be capitalised if they are directly attributable to qualifying assets .

E. Borrowing costs should commence to be capitalised once expenditure is being incurred on the construction of the asset.

3. How much should be recorded as finance costs in the statement of P/L and how much interest should be capitalised as part of PPE as at 31, March, 2021?

4. If Apex decided that; not all of the funds raised were needed immediately and temporarily invested; some of the funds in April, 2020 earning $40,000 interest.

How should the $40,000 be accounted for in the F/S^s of Apex?

A. Net off the amount capitalised in PPE.

B. Taken to the statement of P/L as investment income.

C. Taken as OCI.

D. Deducted from the outstanding loan amount in the SFP.