4. Elaborate the accounting treatment on the special equipment that was acquired from Australia and its presentation
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4. Elaborate the accounting treatment on the special equipment that was acquired from Australia and its presentation on the financial statements for the year ended 31 December 2021.
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AgroLeisure Bhd AgroLeisure Bhd had involved in agricultural activities since late 1990s. The principal activity of AgroLeisure Bhd was growing Malaysian tropical fruits. The harvested fruits would be sold to several distributor companies throughout the country. To attract domestic and international visitors to its plantation, AgroLeisure Bhd also involved in agritourism activities. AgroLeisure Bhd had invested into ten village-styled chalets in 2020 costing RM50,000 each. The chalets were rented out to interested visitors. The fair value of the chalets at 31 December 2020 and 31 December 2021 were RM600,000 and RM660,000 respectively. In January 2021, AgroLeisure Bhd acquired a piece of land at a fair value of RM3,000,000 nearby its plantation field. The acquisition was financed by issuing 3,000,000 ordinary shares at RM1 each. The cost of demolishing old building on the land was RM550,000 and the waste materials were sold for RM150,000. The payment on demolition cost was settled by cheque. Currently, AgroLeisure Bhd had not decided on the use of the land. The fair value of the land at 31 December 2021 was RM3,600,000. At 1 April 2021, AgroLeisure Bhd acquired a special equipment from Australia to restore the fruits' freshness. The equipment was acquired at an invoice price of AUD1 million with a useful life of 10 years. AgroLeisure Bhd paid 20% of the invoice price on the acquisition date. The exchange rates were provided as follows: 1 April 2021 31 December 2021 Exchange Rate AUD1: MYR3.15 AUD1: MYR3.04 AgroLeisure Bhd AgroLeisure Bhd had involved in agricultural activities since late 1990s. The principal activity of AgroLeisure Bhd was growing Malaysian tropical fruits. The harvested fruits would be sold to several distributor companies throughout the country. To attract domestic and international visitors to its plantation, AgroLeisure Bhd also involved in agritourism activities. AgroLeisure Bhd had invested into ten village-styled chalets in 2020 costing RM50,000 each. The chalets were rented out to interested visitors. The fair value of the chalets at 31 December 2020 and 31 December 2021 were RM600,000 and RM660,000 respectively. In January 2021, AgroLeisure Bhd acquired a piece of land at a fair value of RM3,000,000 nearby its plantation field. The acquisition was financed by issuing 3,000,000 ordinary shares at RM1 each. The cost of demolishing old building on the land was RM550,000 and the waste materials were sold for RM150,000. The payment on demolition cost was settled by cheque. Currently, AgroLeisure Bhd had not decided on the use of the land. The fair value of the land at 31 December 2021 was RM3,600,000. At 1 April 2021, AgroLeisure Bhd acquired a special equipment from Australia to restore the fruits' freshness. The equipment was acquired at an invoice price of AUD1 million with a useful life of 10 years. AgroLeisure Bhd paid 20% of the invoice price on the acquisition date. The exchange rates were provided as follows: 1 April 2021 31 December 2021 Exchange Rate AUD1: MYR3.15 AUD1: MYR3.04
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The accounting treatment and presentation of the special equipment acquired from Australia for AgroLeisure Bhd for the year ended 31 December 2021 wou... View the full answer
Related Book For
Auditing Assurance Services and Ethics in Australia an Integrated Approach
ISBN: 978-1442539365
9th edition
Authors: Alvin A Arens, Peter J. Best, Greg Shailer, Brenton Fiedler
Posted Date:
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