Fisheries Bhd is a small listed company involves in fishing and selling fish to the public via retail outlets. The company owns a building that was acquired in early September 2014 for RM1,200,000, with an estimated useful life of 20 years. It also possesses two boats, with details as below:

• Mirabella Boat that was purchased for RM600,000 on 8 February 2015; and
• Fleur Boat, a qualifying asset under MFRS 123 Borrowing Costs, constructed by Fisheries Bhd from 1 March 2016 to 30 November 2016.

The company had the following outstanding loans as at 31 December 2016:

Bank

Loan amount (RM)

Interest rate (%)

Date loan raised

Status of loan

General loan:

TZ Bank

400,000

12

1 January 2015

Date loan settled: 25 July 2016

ZE Bank

450,000

15

1 October 2015

Ongoing

Construction loan:

TZ Bank

500,000

12

1 April 2016

Ongoing

Construction costs of the boat include:

Detail

Amount (RM)

Payment date

Purchase of materials

570,000

1 March 2016

Cost of labour

240,000

5 June 2016

Other expenditures

270,000

20 July 2016

On 31 December 2018, the financial year-end (FYE) of Fisheries Bhd, Mirabella Boat collided with other boats in Blue Sea. The boat market value dropped to RM230,000, before taking into account the expected selling cost of RM30,000. After the collusion, it is estimated that the net present value from the use of the damaged boat is RM200,000 and an estimated net present value from the sale of the damaged boat is RM10,000.

When finalising the accounts for the FYE 2018, the accountant received a memo from the management that the building was revalued to RM1.5 million by Wembley Appraisal on 31 December 2018. Fisheries Bhd adopts the revaluation model to account for the building subsequently. The estimated useful life of the building remains the same, and the company transfers the accumulated other comprehensive income to retained earnings as the asset is used. On the other hand, the accounting policy relating to boat remains unchanged and is as follows:

The boat is carried at cost less accumulated depreciation and accumulated impairment losses. Depreciation is provided at 15% per annum on a straight-line basis.

The elements of the financial statements are fully recognised for a month if the transactions related to those elements occur more than 14 days in the month.

REQUIRED:

(Round your answer to the whole number)

(a)Calculate the interest to be capitalised for the construction of Fleur Boat. Prepare the journal entries related to the interest capitalisation for the year 2016.

(b)Calculate the recoverable amount and impairment loss for Mirabella Boat, if any, on 31 December 2018 and prepare the relevant journal entries, if any.

(c)Prepare the necessary journal entries related to the revaluation of the building for the years 2018 and 2019.

(d)After a few years of using Fleur Boat, the boat was repaired during the FYE 2019 at the cost of RM50,000. The repair includes removing the old fibreglass skin with a new fibreglass and painting of the peeling paint. Fisheries Bhd would obtain 'future economic benefits' after the repair. Explain the accounting treatment for the repair of the boat.