Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(b) Neno Sdn Bhd purchased a machine for production purposes on 1 January 2019 for RM200,000. The machine has an estimated useful life of 5

image text in transcribed

(b) Neno Sdn Bhd purchased a machine for production purposes on 1 January 2019 for RM200,000. The machine has an estimated useful life of 5 years and a salvage value of RM50,000. The machine is a cash-generating unit. During 2019, Neno Sdn Bhd's production dropped significantly due to aggressive competition. Neno Sdn Bhd decided to provide impairment loss for the machinery for the year ended 31 December 2019. The net selling price of the machine as at that date was RM76,000 and its projected cash inflows from the machine were estimated as follows: Year 1 2 3 RM 50.000 41,000 37,000 The company's incremental borrowing rate is 6% and the table of present value factors is as following:- Period 1 6% 0.9434 0.8900 0.8396 2 3 Required: With respect to MFRS 136, Impairments of Assets, calculate the impairment loss for the machine for the year ended 31 December 2019. Show relevant workings. [5 marks]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting an introduction to concepts, methods and uses

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

13th Edition

978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003

More Books

Students also viewed these Accounting questions