The following are transactions related to property, plant and equipment of Tulsi Sdn Bhd occurred during...

 

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The following are transactions related to property, plant and equipment of Tulsi Sdn Bhd occurred during 2023: Jan 2 June 30 Oct 29 Exchanged old equipment that cost RM69,000 and accumulated depreciation of RM32,000 with new equipment with a list price of RM179,000 and a cash payment of RM53,000. The fair value of old equipment is RM36,500. New equipment is depreciated using the straight-line method for four years with a residual value of 4% of the cost. Depreciation is fully charged in the year the asset is acquired, and no depreciation in the year the asset is disposed of. Sold a building that cost RM1,290,000 and received cash of RM270,000 and notes of RM680,000. At the beginning of 2023, the building had been used for 15 years. Acquired land with a building for RM850,000. Based on a qualified independent valuer, the fair value of the land and building at the acquisition date was RM364,000 and RM546,000, respectively. Required: Based on MFRS 116 Property, Plant and Equipment, prepare the journal entries for all transactions above, including depreciation expense for the year ending December 31, 2023. The company policy states that the building is depreciated using a straight-line method with an estimated useful life of 40 years and a residual value of 20% of the cost. Depreciation is fully charged in the year the asset is acquired, and no depreciation in the year the asset is disposed of. Part B The financial data of Cilantro Inds Bhd showed that the productivity of a machine used in the production is different than expected. Therefore, the productivity assessment of the machine was done in October 2023. Data indicated that the machine was acquired at a cost of RM1,800,000. The current accumulated depreciation was RM995,000, the expected machine cost to sell was RM35,000, and the expected present value of cash flow generated by the machine during the balance of its useful life of 4 years was RM975,000. Required: Explain what Cilantro Inds should do on December 31, 2023, in accordance with MFRS 136 Impairment of Assets. Justify your answer. The following are transactions related to property, plant and equipment of Tulsi Sdn Bhd occurred during 2023: Jan 2 June 30 Oct 29 Exchanged old equipment that cost RM69,000 and accumulated depreciation of RM32,000 with new equipment with a list price of RM179,000 and a cash payment of RM53,000. The fair value of old equipment is RM36,500. New equipment is depreciated using the straight-line method for four years with a residual value of 4% of the cost. Depreciation is fully charged in the year the asset is acquired, and no depreciation in the year the asset is disposed of. Sold a building that cost RM1,290,000 and received cash of RM270,000 and notes of RM680,000. At the beginning of 2023, the building had been used for 15 years. Acquired land with a building for RM850,000. Based on a qualified independent valuer, the fair value of the land and building at the acquisition date was RM364,000 and RM546,000, respectively. Required: Based on MFRS 116 Property, Plant and Equipment, prepare the journal entries for all transactions above, including depreciation expense for the year ending December 31, 2023. The company policy states that the building is depreciated using a straight-line method with an estimated useful life of 40 years and a residual value of 20% of the cost. Depreciation is fully charged in the year the asset is acquired, and no depreciation in the year the asset is disposed of. Part B The financial data of Cilantro Inds Bhd showed that the productivity of a machine used in the production is different than expected. Therefore, the productivity assessment of the machine was done in October 2023. Data indicated that the machine was acquired at a cost of RM1,800,000. The current accumulated depreciation was RM995,000, the expected machine cost to sell was RM35,000, and the expected present value of cash flow generated by the machine during the balance of its useful life of 4 years was RM975,000. Required: Explain what Cilantro Inds should do on December 31, 2023, in accordance with MFRS 136 Impairment of Assets. Justify your answer.