A. Teng Teng Berhad was incorporated on 2 January 2010 but was unable to begin manufacturing activities until 1 August 2010 because new factory facilities were not completed until that date. The Land and Building account at 31 December 2010 per the books was as follows: Date 31/01/10 28/02/10 01/04/10 01/05/10 01/05/10 01/05/10 01/08/10 01/08/10 31/12/10 Ttem Land and disused buildings Cost of demolishing buildings Legal fees Fire insurance premium payment Special tax assessment for streets Partial payment of new building construction Final payment on building construction General expenses Asset write-up RM 200,000 4,000 6,000 5,400 4,500 150,000 150,000 30,000 75,000 624.900 Additional information: 1. To acquire the land and building on 31 January 2010, the company paid RM100,000 cash and 1,000 shares of its ordinary share (par value = RM100/share) which is very actively traded and had a market value per share of RM170. 2. When the old building was demolished, Teng Teng paid Kawang Demolition Sdn Bhd RM4,000, but also received RM1,500 from the sale of salvaged material. 3. Legal fees covered the following: Cost of organization Examination of title covering purchase of land Legal work in connection with the building construction RM 2,500 2,000 1.500 6.000 4. The fire insurance premium covered premlums for a three-year term beginning 1 May 2010. 5. General expenses covered the following for the period 2 January to 1 August 2010 President's salary Plant superintendent covering supervision of new building RM 20,000 10.000 30.000 ACC3102 SULIT 6. Because of the rising land costs, the president was sure that the land was worth at company. least RM75,000 more than what it cost the Required: Determine the proper balances as of 31 December 2010 for: a) Land account Use separate T-account and label all the relevant amounts and show all computations). (5 marks) b) Building account (Use separate T-account and label all the relevant amounts and show all computations). (5 marks) B. On 1 July 2009, Diman Berhad purchased for RM2,160,000 keropok-making equipment having an estimated useful life of 5 years with an estimated salvage value of RM90,000. Depreciation is taken for the portion of the year the asset is used. Required: a) Calculate the depreciation expense and year-end book values for 2009 and 2010 using the i. sum-of-the-years'-digits method. (3 marks) ii. double-declining balance method. (3 marks) b) Assume the company used straight-line depreciation during 2009 and 2010. During 2011, the company determined that the equipment would be useful to the company for only one more year beyond 2011. Salvage value is estimated at RM120,000. Compute the amount of depreciation expense for the 2011 income statement. (4 marks)