7. BagIT Sdn. Bhd., which supplies different types of bags, observes an accounting period that ends every 30 September. Comment on the appropriateness of the accounting procedure used by BagIT Sdn. Bhd. (a) On 1 August 2019, BagIT received a new batch of inventories costing RM38,000. On 30 September 2019, BagIT would have to pay RM42,000 to acquire the same inventories, due to changes in the exchange rate. Gains from an increase in the market price of inventories were recognized. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions). (4 Marks) (b) An order was received from a customer on 20 September 2019 for goods with an invoice value of RM20,000. Half (50\%) of the total invoice value was received on 25 September 2019 , while the balance will be settled upon receipt of the goods. The goods were shipped on 5 October 2019. Sales revenue was recognized on 25 September 2019. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions). (6 Marks) (c) During the current accounting period, BagIT sold its old delivery van for RM35,000, thus making a gain of RM12,000. The company also bought a new delivery van for RM 50,000 . The useful life of the new van is five years. The management has decided to recognize the gains over a period of five years, as a reduction in the depreciation expense of the new van. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions). (10 Marks) (d) During the current year, the Chairman of BagIT bought a high-end desktop computer for RM7,500. The computer will be used by his son who is pursuing his studies in Graphic Design. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions) for the purchase. 7. BagIT Sdn. Bhd., which supplies different types of bags, observes an accounting period that ends every 30 September. Comment on the appropriateness of the accounting procedure used by BagIT Sdn. Bhd. (a) On 1 August 2019, BagIT received a new batch of inventories costing RM38,000. On 30 September 2019, BagIT would have to pay RM42,000 to acquire the same inventories, due to changes in the exchange rate. Gains from an increase in the market price of inventories were recognized. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions). (4 Marks) (b) An order was received from a customer on 20 September 2019 for goods with an invoice value of RM20,000. Half (50\%) of the total invoice value was received on 25 September 2019 , while the balance will be settled upon receipt of the goods. The goods were shipped on 5 October 2019. Sales revenue was recognized on 25 September 2019. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions). (6 Marks) (c) During the current accounting period, BagIT sold its old delivery van for RM35,000, thus making a gain of RM12,000. The company also bought a new delivery van for RM 50,000 . The useful life of the new van is five years. The management has decided to recognize the gains over a period of five years, as a reduction in the depreciation expense of the new van. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions). (10 Marks) (d) During the current year, the Chairman of BagIT bought a high-end desktop computer for RM7,500. The computer will be used by his son who is pursuing his studies in Graphic Design. You are required to illustrate the recording of the transactions in the Journal (Book of Primary transactions) for the purchase