Question: 5. Awantec Sdn. Bhd. acquired a machine model Z-tec at the price of RM1,000,000 on 1 January 2015. The company used the machine in

5. Awantec Sdn. Bhd. acquired a machine model Z-tec at the price

5. Awantec Sdn. Bhd. acquired a machine model Z-tec at the price of RM1,000,000 on 1 January 2015. The company used the machine in its production plan. Economic useful life of the machine was estimated to be 15 years with no scrap value. The machine was revalued on 31 December 2015 at RM1,380,000. On 31 December 2017, declining sales of the product produced by the machine due to financial problem faced by two of its major customers has caused the company to estimate recoverable value at net fair value of RM700,000. The company's cost of capital is at 5%. Projected cash inflow for the machine: As at 31/12/2018 31/12/2019 RM 350,000 250,000 200,000 31/12/2020 Required to prepare: The relevant journal entries in the book of Awantec Sdn. Bhd. from the year 2015 until 2017 for machine model Z-tec. (Notes: The company accounts for its asset using revaluation model and made annual transfer from revaluation reserve to retained earnings.) (Question 6) 6. Referring to information of Awantec Sdn. Bhd. in question 5. (20 marks) Due to the new marketing strategies which focused on potential customers in various new region, Awantec Sdn. Bhd. on 31 December 2019 starting to receive new long-term large orders of its product from new customers. This eventually led the company to reassess the recoverable amount of machine Z-tec and thus provide a new estimate of RM1,100,000. Required to prepare: The relevant journal entries in the book of Awantec Sdn. Bhd. from the year 2018 until 2020 in regards to the machine owned. (Notes: The company accounted for its asset using revaluation model and made the annual transfer from revaluation reserve to retained earnings.) (20 marks)

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