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100 b) Drinkwater Ltd is constructing a warehouse that will take about 18 months to complete. It began construction on 1st January 2019. The following payments were made during 2019: GH'000 31st January 200 31st March 450 30th July 30th September 200 1st December 250 The first payment on 31st January was funded from the entity's pool of debt. However, the entity succeeded in raising a medium-term loan for an amount of GH800,000 on 31st March, 2019, with simple interest of 9% per annum, calculated and payable monthly in arrears. These funds were specifically used for this construction. Excess funds were temporarily invested at 6% per annum monthly in arrears and payable in cash. The pool of debt was again used to an amount of GH200,000 for the payment on 30th November, which could not be funded from the medium- term loan. The construction project was temporarily halted for 3 weeks in May when substantial technical and administrative work was carried out. Drinkwater Ltd adopted the accounting policy of capitalizing borrowing costs. The following amounts of debt were outstanding at the balance sheet date, 31st December 2019: GH'000 Medium-term loan (see description above) 800 Bank overdraft 1,200 (The weighted average amount outstanding during the year was GH750,000 and total interest charged by the bank amounted to GH33,800 for the year). A 10%, 7-year note dated 31st October 2023 with simple interest payable annually at 31st December) 9,000 Required: Calculate the borrowing costs to be capitalized (10 marks)

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