On 1 January 2021, Polluter Bhd opened a new plant in Penang Island. The following costs...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On 1 January 2021, Polluter Bhd opened a new plant in Penang Island. The following costs were incurred during January 2021 in respect of the new plant: • invoiced price of the plant RM60 000 000 • direct costs of testing of plant to ensure that it is operating in the manner intended by management RM2 000 000 • proceeds from the sale of the goods produced in testing (as scrap) ( RM600 000) • costs incurred in selling the scrap produced during testing RM100 000 • plant opening function for dignitaries, staff and clients RM1 000 000 From 1 February 2021, the plant was ready to operate in the manner intended by management. The plant incurred an operating loss of RM5 000 000 for the month ended 28 February 2021, primarily due to initial low orders levels due to extending nationwide movement control order (MCO) by Malaysian government. Production levels reached break-even point in early March 2021, and thereafter the plant operated profitably. Environmental legislation requires that the site upon which the plant is developed be rehabilitated by Polluter Limited at the end of the plants useful economic life that has been reliably estimated at 10 years. On 1 January 2021, an environmental restoration provision of RM1 million was, in accordance with MFRS 137, raised in this respect. Required: Calculate the cost of the plant in accordance with MFRS 116- Property, plant and equipment. Briefly support your answer On 1 January 2021, Polluter Bhd opened a new plant in Penang Island. The following costs were incurred during January 2021 in respect of the new plant: • invoiced price of the plant RM60 000 000 • direct costs of testing of plant to ensure that it is operating in the manner intended by management RM2 000 000 • proceeds from the sale of the goods produced in testing (as scrap) ( RM600 000) • costs incurred in selling the scrap produced during testing RM100 000 • plant opening function for dignitaries, staff and clients RM1 000 000 From 1 February 2021, the plant was ready to operate in the manner intended by management. The plant incurred an operating loss of RM5 000 000 for the month ended 28 February 2021, primarily due to initial low orders levels due to extending nationwide movement control order (MCO) by Malaysian government. Production levels reached break-even point in early March 2021, and thereafter the plant operated profitably. Environmental legislation requires that the site upon which the plant is developed be rehabilitated by Polluter Limited at the end of the plants useful economic life that has been reliably estimated at 10 years. On 1 January 2021, an environmental restoration provision of RM1 million was, in accordance with MFRS 137, raised in this respect. Required: Calculate the cost of the plant in accordance with MFRS 116- Property, plant and equipment. Briefly support your answer On 1 January 2021, Polluter Bhd opened a new plant in Penang Island. The following costs were incurred during January 2021 in respect of the new plant: • invoiced price of the plant RM60 000 000 • direct costs of testing of plant to ensure that it is operating in the manner intended by management RM2 000 000 • proceeds from the sale of the goods produced in testing (as scrap) ( RM600 000) • costs incurred in selling the scrap produced during testing RM100 000 • plant opening function for dignitaries, staff and clients RM1 000 000 From 1 February 2021, the plant was ready to operate in the manner intended by management. The plant incurred an operating loss of RM5 000 000 for the month ended 28 February 2021, primarily due to initial low orders levels due to extending nationwide movement control order (MCO) by Malaysian government. Production levels reached break-even point in early March 2021, and thereafter the plant operated profitably. Environmental legislation requires that the site upon which the plant is developed be rehabilitated by Polluter Limited at the end of the plants useful economic life that has been reliably estimated at 10 years. On 1 January 2021, an environmental restoration provision of RM1 million was, in accordance with MFRS 137, raised in this respect. Required: Calculate the cost of the plant in accordance with MFRS 116- Property, plant and equipment. Briefly support your answer On 1 January 2021, Polluter Bhd opened a new plant in Penang Island. The following costs were incurred during January 2021 in respect of the new plant: • invoiced price of the plant RM60 000 000 • direct costs of testing of plant to ensure that it is operating in the manner intended by management RM2 000 000 • proceeds from the sale of the goods produced in testing (as scrap) ( RM600 000) • costs incurred in selling the scrap produced during testing RM100 000 • plant opening function for dignitaries, staff and clients RM1 000 000 From 1 February 2021, the plant was ready to operate in the manner intended by management. The plant incurred an operating loss of RM5 000 000 for the month ended 28 February 2021, primarily due to initial low orders levels due to extending nationwide movement control order (MCO) by Malaysian government. Production levels reached break-even point in early March 2021, and thereafter the plant operated profitably. Environmental legislation requires that the site upon which the plant is developed be rehabilitated by Polluter Limited at the end of the plants useful economic life that has been reliably estimated at 10 years. On 1 January 2021, an environmental restoration provision of RM1 million was, in accordance with MFRS 137, raised in this respect. Required: Calculate the cost of the plant in accordance with MFRS 116- Property, plant and equipment. Briefly support your answer
Expert Answer:
Answer rating: 100% (QA)
According to MFRS 116 Property Plant and Equipment the cost of an item of property plant and equipme... View the full answer
Posted Date:
Students also viewed these accounting questions
-
Mulberry Services sells electronic data processing services to firms too small to own their own computing equipment. Mulberry had the following accounts and account balances as of January 1, 2011:...
-
Mulberry Services sells electronic data processing services to firms too small to own their own computing equipment. Mulberry had the following accounts and account balances as of January 1, 2019:...
-
Use Sentiment analysis Sentiment analysis is extremely useful in social media monitoring as it allows us to gain an overview of the wider public opinion behind certain topics.The applications of...
-
A heat engine cycle is executed with ammonia in the saturation dome. The pressure of ammonia is 1.5 MPa during heat addition and 0.6 MPa during heat rejection. What is the highest possible thermal...
-
We take another look at health, this time examining the relationship between educational attainment and perceived quality of health care. Data for three groups are presented based on the HINTS2012...
-
(A) Show that (0, 0) is a critical point of the function g(x, y) = e xy 2 + x 2 y 3 + 2, but that the second derivative test for local extrema fails. (B) Use cross sections, as in Example 2, to...
-
Find a California case where social media was used.
-
Wicker Works Inc.'s budgeted unit sales for the year 2013 were: Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 Chairs . . . . . . . . . . . ....
-
Case A B Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers 100,000 101,000 100,000 83,000 $ 54 $ 31 Variable costs per unit $...
-
As Lush UK implemented the change, how could it measure the effects of leaving and then returning to social media on the achievement of its marketing goals? Lush Fresh Handmade Cosmetics UK sells...
-
Assume you are the CEO of a very large manufacturing company with three locations and 2,000 employees. Three of your direct reports are the VP of Manufacturing, the VP of Sales and Marketing, and the...
-
What is the purpose of a preliminary survey and how is it performed?
-
What questions must an auditor consider in determining what corrective action to propose?
-
Why does the operational auditor assess risk?
-
You are given the following simplified statement of financial position of the Hackin Company as at 30 June year 9. a Calculate the companys current ratio and liquidity ratio. b The following...
-
What general functions are usually applicable in an operational audit?
-
Marketing Plan Objectives / Goals - look at the weighting criteria plus your own at the end of Q12. Strategies KPI - Key Performance Indicators - (measurement criteria of your goals) Competitive...
-
D Which of the following is considered part of the Controlling activity of managerial accounting? O Choosing to purchase raw materials from one supplier versus another O Choosing the allocation base...
-
A hospitals records show that the cost of carrying out health checks in the last five accounting periods has been as follows: Using the highlow method and ignoring inflation, the estimated cost of...
-
Intermediate: Cost estimation using the linear regression formula. The management accountant at Josephine Ltd is trying to predict the quarterly total maintenance cost for a group of similar...
-
The budget for the production cost of a new product was based on the following assumptions: (i) Time for the 1 st batch of output = 10 hours (ii) Learning rate = 80 per cent (iii) Learning will cease...
Study smarter with the SolutionInn App