Question
During the year 2020, Akasia Maju Bhd (AMB) purchased a piece of land with an existing building for RM1,125,000. The land was valued at RM1,050,000
During the year 2020, Akasia Maju Bhd (AMB) purchased a piece of land with an existing building for RM1,125,000. The land was valued at RM1,050,000 and the building at RM75,000. AMB demolished the building and constructed a new building as headquarters on the site. The new building and land improvement are expected to last for 80 years with no residual value and the construction was fully completed by the end of the year 2020.
The following represents the various items related to the project in year 2020:
Items | RM |
Lawyers fee to close the purchase deal | 22,500 |
Cost of land fill and clearing | 18,000 |
Architects fee | 120,000 |
Fencing around the land | 60,000 |
Cost of demolishing existing building | 97,500 |
Interest on financing of construction paid during construction | 282,000 |
Receipts from sale of demolition scraps | 15,000 |
Construction costs | 1,200,000 |
Landscaping (trees and shrubs) | 30,000 |
Parking lots and concrete walks on the property | 180,000 |
Insurance premium during construction period | 18,000 |
Moving costs from old headquarters to new headquarters | 150,000 |
To accommodate the mission of improving productivity and efficiency, the company also bought a new special equipment and made the following payments.
Items | RM |
Manufacturers list price | 4,303,500 |
Trade discount | 37,500 |
Delivery charge | 75,000 |
Installation charge | 50,250 |
Additional components to increase capacity | 107,250 |
Service and maintenance | 24,750 |
Replacement parts | 17,000 |
Test runs | 16,500 |
Small spare parts | 2,600 |
REQUIRED:
Calculate the cost of land, land improvement, building and equipment based on MFRS 116 Property, Plant and Equipment. Please show your calculations.
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