Case $1$

Gu Nanzhou Manufacturing Bhd$.($GNMB$)$ acquired a plant on $1$ January $2019$ for RM$500,000.$ The

expected useful life for the property is $5$ years. GNMB uses the revaluation model for this plant. On $31$

December $2019,$ the fair value of the plant was RM$420,000.$ On $31$ December $2020,$ the plant was

partly damaged due to flash flood that hit the surrounding area of the GNMB$$s factory building. GNMB

planned to buy a new plant to replace the damaged plant. Insurance company willing to reimburse

GNMB RM$280,000$ for the old plant. The value in used for the old plant was RM$250,000.$ The new

plant was finally purchased on $1$ January $2021$ for RM$600,000$ using bank loan.

Case $2$

Daebak Property Investment Bhd$.($DPIB$)$ bought an investment property on $1$ January $2020$ for RM$1$

million which is the fair value of the property. The useful life for the property was $20$ years. On $1$ July

$2020,$ DPIB decided to convert the property to owner$-$occupied property. The fair value of the property

as at that date was RM$1\mathrm{.}2$ million and DPIB decided to adopt revaluation model. As at $31$ December

$2020,$ the fair value of the property was RM$1\mathrm{.}3$ million.

Case $3$

DPIB also bought several antique furniture from several local companies for RM$150,000$ on $1$

February $2020.$ DPIB intend to sell the antiques later for capital appreciation. Currently, all the

antiques are sent for refurbishment. Total refurbishment cost amounted to RM$50,000.$ The contractor

advised DPIB the antiques can only be sold in January $2021.$ DPIB actively advertised the antiques in

local newspapers and webpages. As of $31$ December $2020,$ the fair value of the antiques based on

professional valuer estimate, stand at RM$250,000.$

In addition, DPIB bought an antique car, VW Beetle, for RM$100,000$ in May $2020.$ The car was sold for

RM$200,000$ in July $2020.$ Another set of antiques cars were purchased in September for RM$300,000.$

Refurbishment of the cars cost RM$20,000.$ The cars were ready in November $2020.$ DPIB actively

advertised the cars in local newspapers and webpages. As of $31$ December $2020,$ these cars were

valued at RM$350,000.$

Case $4$

On $1$ January $2020,$ DPIB acquired $30,000$ quoted shares of Delilah Manufacturing Berhad $($DMB$)$ at

RM$3$ per share through cash. These $30,000$ shares represent $7\%$ of DMB$$s total shares. Transaction

cost that DPIB incurred was RM$2,000.$ DPIB intended to hold the shares for short term investment

purposes. The fair value of each of this share on $31$ December $2020$ was RM$4.$ DMB shares were

eventually sold for RM$140,000$ in January $2021.$

Required:

a$)$ Based on the above, discuss on how you would account for each of the $4$ cases stated above.

You are required to support your answers using appropriate approved accounting standards:

$(5$ marks$)$

b$)$ Based on the relevant approved accounting standards that you have chosen in $($a$),$ journalise

each of the transactions in the above $4$ cases for the year ended $31$ December $2019$ and $2020.$

Show all your workings.

$(17$ marks$)$

c$)$ Prepare DPIB$$s extract of Income Statement for the year ended $31$ December $2020$ and

Statement of Financial Position as at $31$ December $2020.$ You are required to show the

summarised figures that incorporate all the items in part $($b$)$ above.

$(8$ marks$)$

$($Total: $30$ Marks$)$