Mega Bhd. purchased a new piece of equipment which was priced at RM400,000 from an equipment manufacturer. Transportation costs involved amounted to RM1,000 while the insurance against damage for the equipment while being transported to the business premises of Mega Bhd. amounted to RM400. Installation costs amounted to RM8,600. Mega Bhd. uses the straight line method for calculation depreciation. The equipment was purchased, transported and installed on the same day, i.e. on the 2 January 2014. 

Assume the equipment can be used for 8 years and the scrap value is estimated to be RM10,000. The company financial year ends on the 31 December each year. 

Required: 

a) Write up the equipment account and provision for depreciation account for the year 2014 to 2018 

b) Show the relevant extract for the statement of comprehensive income and the statement of financial position for the year 2014 to 2018.

Answer rating: 100% (QA)

Given Useful life of Equipment 8 years Residual Value RM 10000 All the costs associated to brin... View the full answer