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(a) Ahmad Trading Sdn Bhd purchased machinery from Spain and they would like to install it in their factory to manufacture their products for sale.
(a) Ahmad Trading Sdn Bhd purchased machinery from Spain and they would like to install it in their factory to manufacture their products for sale. Required: As their external consultant, you are requested to advise them on the items to be included in the cost of the machinery purchased and installed. (10 marks) (b) On 1 January 2017, Gardon Sdn Bhd received a RM30,000 government grant relating to equipment which cost RM90,000 and had a useful life of six years. The grant was netted off against the cost of the equipment. On 1 January 2018, when the equipment had a carrying amount of RM50,000, its use was changed so that it was no longer being used in accordance with the grant. This meant that the grant needed to be repaid in full but by 31 December 2018, this had not yet been done. Required: Determine the correct accounting treatment of the government grant and the equipment in the financial statements of Gardon Sdn Bhd for the year ended 31 December 2018. (6 marks) (c) Jeff Sdn Bhd prepares financial statements for the year ended 31 December 2019. The financial statements are expected to be authorized for issue on 15 March 2020. The following two events have occurred in January 2020: Safety fine A safety investigation of an incident that occurred in 2018 was concluded in January 2020 which penalized them from RM2 million. A provision for RM1 million had been recognised in Jeff's financial statements for the year ended 31 December 2019. Customer ceased operation On 10 January 2020, they were informed that a customer who owed them RM2.5 million as at 31 December 2019 has ceased its operation due to financial difficulties. Required: Illustrate the proper accounting treatments for the above two events in accordance with MFRS 110, Events after the Reporting Period. (9 marks
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