Lampung Bhd. is a company incorporated in Malaysia. The company is a food and beverage (F&B) packaging manufacturer. It is owned and operated by a Malaysian Expertise in the F&B packaging industry. The company has imported the highest manufacturing technology from Japan, with the strictest quality control. With the change in eating habits in today's society where they use a lot of microwave ovens, the company aims to be the leader in providing affordable packed F&B products with superior quality. 

Below is the trial balance of Lampung Bhd. 

 

Additional information: 

1. The company adopts the revaluation model for its building. As of 1 July 2018, the fair value of the building is RM95 million. On that date, the remaining useful life of the building is 25 years. As of year-end, the revaluation amount has not yet been recorded. 585,147 

Note: the company follows the requirement of MFRS 116 where the company makes an annual transfer to retained earnings for any revaluation surplus as the asset is being used and depreciated. 

2. Asset revaluation reserve as at 1 July 2018 amounted to RM16 million as stated in the trial balance is related to the revaluation that was done a few years ago on the company's freehold land, located in Sepang. On 30 June 2019, the freehold land was once again revalued to RM160 million. However, the new revalued amount has not yet been recorded. 

3. On 1 July 2018, the company purchased new equipment costing RM1,650,000 to replace the old equipment purchased in July 2014 at RM1,220,000. The old equipment was trade- in for RM885,000. The transaction on 1 July 2018 has not yet been recorded. Plant and machinery are depreciated over their useful life of 10 years. The depreciation expenses are classified as administrative expenses. 

The company's policy is to depreciate all its property, plant and equipment using the straight-line method yearly, giving a full year's depreciation in the year of purchase and none in the year of disposal. 

4. A plant which was purchased on 1 July 2012 at the cost of RM1,340,000 had a reduction in production capacity since September 2018. This has caused several breakdowns during the production process. Therefore, the board of directors of Lampung Bhd decided to provide impairment on the plant by year-end. The plant's fair value as of 30 June 2010 is RM350,000, and if it is disposed of, the company has to incur a dismantling cost of RM12.400. No record has been made to account for the impairment loss. 

5. The company acquired a building costing RM2,500,000 on 1 July 2013 with an estimated useful life of 30 years. The building is rented out to a third party for RM15,000 per month, and the tenancy agreement will be expired on 30 June 2019. Since its acquisition, the building was reclassified as an investment property, and the company adopted the fair value model to measure its investment property after the initial recognition. 

The fair value of the investment property on 30 June 2018 was RM4,828,000, and the figure has been recorded. 

Based on the tenancy agreement, the rental needs to be paid annually and will be due on 30 June each year. However, the rental income for the year ended 30 June 2010 has not been received, and no record has been made to accrue the rental amount. 

As of 30 June 2019, the company decided not to renew the tenancy agreement and planned to use the building as the company's research center. On that date, the fair value of the building was RM5,350,000. No records have been made to account for these transactions.

6. On 1 July 2018, the company started a dairy cattle breeding business to grab the opportunity of increasing demand for fresh milk. For a start, the company has purchased several dairy cattle to meet the demand by its own processing plants. In the future, the company plans to expand the business of fresh milk to the external markets. 

On 1 July 2018, company purchased the following: 

1-year old -20 dairy cattle 

2-year old -30 dairy cattle 

3-year old 10 dairy cattle

Transcribed Image Text:

Sales Cost of sales Interim dividend paid Administrative expenses Selling and distribution expenses Interest expenses Tax payable Freehold land at valuation as at 1 July 2018 Building at cost as at 1 July 2018 Plant and machinery at cost as at 1 July 2018 Accumulated depreciation as at 1 July 2018: Building Plant and machinery Investment property at fair value as at 1 July 2018 Intangible assets Fixed deposits Ordinary share capital Retained earnings as at 1 July 2018 Asset revaluation reserve as at 1 July 2018 (related to freehold land) 5% Debentures Trade receivables and payables Cash and bank Inventaries Income tax paid Debit RM 000 99,310 16,000 31,025 28,331 700 142,600 90,650 53,430 4,628 30,800 26,200 19,484 16,690 23,658 1,651 585.147 Credit RM'000 193,100 1,208 9,085 15,915 255,000 63,256 16,000 28,000 3,603 585,147 Sales Cost of sales Interim dividend paid Administrative expenses Selling and distribution expenses Interest expenses Tax payable Freehold land at valuation as at 1 July 2018 Building at cost as at 1 July 2018 Plant and machinery at cost as at 1 July 2018 Accumulated depreciation as at 1 July 2018: Building Plant and machinery Investment property at fair value as at 1 July 2018 Intangible assets Fixed deposits Ordinary share capital Retained earnings as at 1 July 2018 Asset revaluation reserve as at 1 July 2018 (related to freehold land) 5% Debentures Trade receivables and payables Cash and bank Inventaries Income tax paid Debit RM 000 99,310 16,000 31,025 28,331 700 142,600 90,650 53,430 4,628 30,800 26,200 19,484 16,690 23,658 1,651 585.147 Credit RM'000 193,100 1,208 9,085 15,915 255,000 63,256 16,000 28,000 3,603 585,147

Answer rating: 100% (QA)

Based on the additional information provided here are the adjusting journal entries that need to be recorded by Lampung Bhd for the year ended 30 June ... View the full answer