HappyLife Bhd has been involved in entertainment and theme park businesses and has been established for...

  

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HappyLife Bhd has been involved in entertainment and theme park businesses and has been established for many years. The company have few branches of mini theme parks located all over Malaysia. The theme parks are using the pay-one-price scheme that charge guests a single admission fee. The guest is then entitled to use most of the attractions in the park as often as they wish during their visit. One of the mini theme parks that is located in Kedah has several assets that do not produce their own cash flows as they generate the business s cash flow as a whole. As at 30 June 2020, the carrying amount of the assets in the Kedah s theme park were as follows: Roller coaster Ferris wheel Water rides Bumper cars Goodwill RM 280,000 250,600 312,600 124,800 26,000 All the above assets (excluding goodwill) are depreciated at straight line method for a useful life of 10 years. As at 30 June 2020, the remaining useful life of the assets were 5 years. In the year 2020 the businesses of HappyLife Bhd have been adversely affected by the new global pandemic Covid -19. Most of the theme parks were unable to be operated due to the movement control order by the government. Hence, the company decided to provide an impairment to its assets. As at 30 June 2020, it was determined that the fair value less cost to sell on the assets in the mini theme park in Kedah was RM550,000 and its value in use was RM620,000. During the year 2021, the company has picked-up its businesses as the movement control order has been lifted up. The mini theme parks were able to be operated again and the company provides more attractions in the theme parks. Hence, the recoverable amount of the mini theme park in Kedah was determined to be RM710,000 as at 30 June 2021. Required: i) ii) iii) Notes: Explain briefly whether the mini theme park is a cash generating unit of HappyLife Bhd or not. (5 marks) Calculate the carrying amount of each of the assets in the mini theme park in Kedah as at 30 June 2020 after the allocation of impairment loss. (6 marks) Calculate the carrying amount of each of the assets in the mini theme park in Kedah as at 30 June 2021 after the allocation of reversal of impairment loss. (9 marks) Calculate all the amounts to the nearest RINGGIT MALAYSIA. HappyLife Bhd has been involved in entertainment and theme park businesses and has been established for many years. The company have few branches of mini theme parks located all over Malaysia. The theme parks are using the pay-one-price scheme that charge guests a single admission fee. The guest is then entitled to use most of the attractions in the park as often as they wish during their visit. One of the mini theme parks that is located in Kedah has several assets that do not produce their own cash flows as they generate the business s cash flow as a whole. As at 30 June 2020, the carrying amount of the assets in the Kedah s theme park were as follows: Roller coaster Ferris wheel Water rides Bumper cars Goodwill RM 280,000 250,600 312,600 124,800 26,000 All the above assets (excluding goodwill) are depreciated at straight line method for a useful life of 10 years. As at 30 June 2020, the remaining useful life of the assets were 5 years. In the year 2020 the businesses of HappyLife Bhd have been adversely affected by the new global pandemic Covid -19. Most of the theme parks were unable to be operated due to the movement control order by the government. Hence, the company decided to provide an impairment to its assets. As at 30 June 2020, it was determined that the fair value less cost to sell on the assets in the mini theme park in Kedah was RM550,000 and its value in use was RM620,000. During the year 2021, the company has picked-up its businesses as the movement control order has been lifted up. The mini theme parks were able to be operated again and the company provides more attractions in the theme parks. Hence, the recoverable amount of the mini theme park in Kedah was determined to be RM710,000 as at 30 June 2021. Required: i) ii) iii) Notes: Explain briefly whether the mini theme park is a cash generating unit of HappyLife Bhd or not. (5 marks) Calculate the carrying amount of each of the assets in the mini theme park in Kedah as at 30 June 2020 after the allocation of impairment loss. (6 marks) Calculate the carrying amount of each of the assets in the mini theme park in Kedah as at 30 June 2021 after the allocation of reversal of impairment loss. (9 marks) Calculate all the amounts to the nearest RINGGIT MALAYSIA.

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Answer 1 The mini theme park is a cash generating unit of HappyLife Bhd 2 The carrying ... View the full answer