Dream city berhad

Dream City Berhad engages in the hospitality and water park business. The financial year end is on 31 December annually. The following are among the assets acquires on 1 January 2015 for a total cost of RM800,000,000: On 1 July 2018, the accountant discovered that there was unexpected damage on the trams and the directors decided to replace the trams with new trams at a cost of RM240,000,000. The expected life of the new trams was determined to be 12 years. At the same time, Dream City Berhad upgraded the furniture and fittings at a cost of RM60 million to suit with the new company rebranding. The remaining useful life of the furniture and fitting was revised to 15 years as at 1 July 2018. On 30 September 2018 , the company completed repainting the building and incurred at a cost of RM500,000. The management is of the opinion that they should continue recognizing the depreciation based on the previous cost of trams as well as furniture and fittings to minimize the expense. In addition, the management feels that the repainting cost amounting to RM500,000 should be capitalized on 30 September 2018. Continued... 4/5 BACI634 FINANCTAL ACCOINTING \& REPORTING I 12 OCTOBER 2019 Required: Apply the principles MFRS 116: Property, Plant and Equipment: a) in proposing the appropriate accounting treatment for the depreciation of the three assets and the repainting cost for the financial year ended 31 March 2019. (10 marks) b) Prepare journal entries to record the depreciation for the three assets and the repainting cost for year 2018