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I hope u can help me to solve this question.. its about property plant n equipment BKAR2023 FINANCIAL ACCOUNTING AND REPORTING 11 (A171) MINI CASE

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I hope u can help me to solve this question.. its about property plant n equipment

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BKAR2023 FINANCIAL ACCOUNTING AND REPORTING 11 (A171) MINI CASE CHAP 1 PROPERTY, PLANT & EQUIPMENT DUE DATE: 26 September 2017 (Tuesday before 4pm) QUESTION 1 On 1 January 2016, Azharina Sdn. Bhd. signed a contract to construct a new building and borrowed RM3,000,000 at 12% payable annually to finance the construction which is estimated to take a year to complete. On 1 January 2016, the company purchased a land for the building construction with a cost of RM200,000. The company made the following expenditures related to this building: 1st March RM360,000; 1st June, RM600,000; 1st July, RM1,500,000; 1st December, RM1,200,000. Additional information according to other debt outstanding is provided as follows. a. b. 15 year, 11% bond, 31 December 2013, interest payable annually RM4,000,000. 12-year, 10% note, dated 31 December 2013, interest payable annually RM1,600,000. REQUIRED: Determine the amount of interest to be capitalized in 2016 in relation to the construction of building. QUESTION 2 On 31 December 2015, Hanisah Sdn. Bhd. borrowed RM3,000,000 at 12% payable annually to finance the construction of a new building, which is estimated to take a year to complete. In 2016, the company made the following expenditures related to this building: 1st March RM360,000; 1st June, RM600,000; 1st July, RM1,500,000; 1st December, RM1,200,000. Additional information is provided as follows. a. Other debt outstanding - 15 year, 11% bond, 31 December 2013, interest payable annually RM4,000,000. And 12-year, 10% note, dated 31 December 2013, interest payable annually RM1,600,000. b. Interest revenue earned in 2016 on funds related to specific borrowing RM49,000. REQUIRED : a) b) Determine the amount of interest to be capitalized in 2016 in relation to the construction of the building. Prepare journal entries to record the capitalization of interest and the recognition of interest expense at 31 December 2016. QUESTION 3 1 On 1 May 2016, Fuzaria Bhd signed a contract with Bina Sintok Sdn Bhd to construct a building at a cost of RM350,000 on land costing RM90,000 (included in the first payment to the contractor). It was estimated that it would take 10 months to complete the project. The payments made by Fuzaria Bhd to Bina Sintok Sdn Bhd are shown in the schedule below: Date 1 May 2016 28 August 2016 31 December 2016 28 February 2017 Amount RM 150,000 110,000 90,000 90,000 Fuzaria Bhd had no new borrowings directly related with the new building but had the following debt outstanding at 31 December 2016, the end of its financial year. 10-year, 11% bond, dated 1 January 2014 6 year, 9% note, dated 1 January 2016 RM5,000,000 RM1,600,000 The project was completed as scheduled and interest revenue earned in 2016 on funds related to bond payable was RM125,000. REQUIRED: (Round your answers to the nearest RM) (a) Calculate the amount of interest to be capitalised in 2016 and prepare the related journal entries. (b) Calculate the amount of interest to be capitalised in 2017. QUESTION 4 Bertama Bhd purchased a new machine on 5 June 2015, at a cost of RM77,000. It is estimated that the machine will have a RM5,000 salvage value at the end of its useful life, which is estimated at ten (10) years. The machine's total production is estimated at 600,000 units. The machine produced 65,000 and 53,000 unit of products during 2015 and 2016. REQUIRED: Compute the depreciation expense on the machine for the year ending 31 December 2015 and the year ending 31 December 2016, by using: (a) Sum-of-years'-digits method (b) Double declining balance method (c) Units-of-output 2 QUESTION 5 The following information relates to the property, plant and equipment of Astira Bhd for the year ended 31 December 2015. Property, Plant and Equipment Land Building Equipment Carrying Amount (RM) Purchase date 185,000 1,900,000 58,800 1 April 2011 1 January 2015 1 January 2014 Estimated useful life at purchase date 20 years 5 years The following transactions occurred during 2016. 1. The land was acquired at RM150,000 and has been revalued in 2014 at RM185,000. In financial year 2016, the company revalued the land to RM140,000. 2. The building original cost was RM2,000,000. On 31 December 2016, Astira Bhd revalued the building to RM2,340,000. The company used straight-line depreciation method. 3. The electrical system was updated at a cost of RM45,000. The cost of the old electrical system was not known. It is estimated that the useful life of the building will not change as a result of this replacement. 4. On 31 December 2016, Astira Bhd tested the equipment for impairment. The company estimated that the present value of expected future net cash flows on the equipment will be RM52,000 and that the fair value less cost to sell will be RM42,300. The company used straight-line depreciation method. REQUIRED: (a) Prepare the journal entries to record the revaluation of land in year 2016. (b) Prepare the journal entries related to the building for the year 2016. Calculate new depreciation for the year 2017. (c) Prepare the journal entry to record the replacement of electrical system. (d) Determine whether Astira Bhd should recognize an impairment loss for the equipment. 3

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