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1 ST Sdn Bhd (ST) purchased a piece of land on 1 April 2020 to be used as its warehouse site for RM120,000. In order
1 ST Sdn Bhd (ST) purchased a piece of land on 1 April 2020 to be used as its warehouse site for RM120,000. In order for ST to effectively use the site, a vacant and unoccupied old building on the land was demolished. A new building was then constructed and completed on 31 December 2020. The costs incurred during the period are listed below: Scrapped materials resulting from the demolition of the old building were sold for RM4,000. Required: (a) Ascertain the amount that ST should capitalize as the cost of the land and the new building. (b) Explain why each of the items listed was included or not included in your answer to part (a), justifying your answer by referring to the requirements outlined in MFRS 116-Property, Plant and Equipment and MFRS 123-Borrowing Costs
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