HMH Bhd. is a pharmaceutical company, has been producing various vaccines for several years. The company is famous for its projects to develop vaccines for various diseases in a factory building costing RM1,000,000, which was acquired on 1 July 2013. The factory building had an estimated useful life of 20 years and was expected to have a zero-residual value. On 1 July 2018, the company acquired four vaccine production machines with five years of the useful life of RM8,300,000 each. The delivery and installation costs for each machine were RM300,000 and RM400,000 respectively. All four machines are used by the company to develop safe, effective vaccines, and have low side effects on humans. On 1 January 2019, the company had collaborated with a few researchers from various hospitals in Malaysia to invent a new vaccine for Covid-19. Sufficient progress has been made and the vaccine was successfully developed and launched to the market on 1 March 2019. However, on 1 June 2019, the World Health Organization (WHO) banned the use of the new vaccine, as not only had it could not cure Covid-19 but that it also caused lung cancer. The vaccine was recalled from the market. The announcement caused HMH Bhd. to drastically reduce the production of the new vaccine and consequently, sales recorded a drop of 80%. On the same day, as torrential rainfall continues to affect the whole country, HMH Bhd. decided to halt the production as the floodwaters poured into the factory building. The board of directors of HMH Bhd. had an urgent meeting and decided to carry out an impairment test of its assets for the year ended 30 June 2019. It was determined that the recoverable amount for the factory building was RM500,000. HMH Bhd. also determined that if the machines were to be sold on 30 June 2019, the sales proceed would be RM16,800,000. The company also revised its cash inflows and cash outflows earned from all the machines for the next three years would be as follows: Year 2021 2022 2023 Cash Inflow RM17,960,000 RM15,880,000 RM16,700,000 Cash Outflow RM11,240,000 RM12,220,000 RM10,290,000 To survive in the health industry, HMH Bhd. had employed two new researchers on 1 July 2019 to enhance the immune response of the vaccine to prevent serious infectious diseases and their complications. On 1 June 2020, the vaccine-induced enhancement was successfully developed and approved by the WHO. The company made an aggressive campaign to introduce this vaccine to the market. It is anticipated that the vaccine will generate high-profit margins and the company is very confident that the vaccine will be in the market for a long time. Based on the projections of future cash flows, the company estimates that the net selling price of the machines was RM30,000,000 while its value in use was expected to be RM35,000,000 at 30 June 2020. HMH Bhd.'s incremental borrowing rate was 10%. The table below presents the present value for single sums, where i = interest and n = years is given below: Year Discount factor at 10% 1 0.9091 2 0.8264 3 0.7513 Required: a. Determine whether the factory building and vaccine production machines have been impaired under the MFRS 136 Impairment of Assets as at 30 June 2019. Prepare journal entries, if required to record the impairment. (10 marks) b. Discuss whether there is any reversal of impairment loss for the year ended 30 June 2020 based on MFRS 136. Prepare journal entries, if required to record the reversal of impairment. (8 marks) c. Show the extract of the Statement of Financial Position as at 30 June 2019 and 30 June 2020. (7 marks)