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PART D . On 1 January 2018, Lilin Bhd borrowed RM400 million to finance the construction of a property, a qualifying asset, which was expected

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PART D . On 1 January 2018, Lilin Bhd borrowed RM400 million to finance the construction of a property, a qualifying asset, which was expected to take three years to build. The following are the details of the loan and the property Interest on the loan was fixed at 10% per annum. Construction work on this property was commenced on 1 January 2018. Funds used for expenditures on the construction of the property were RM200 million on 1 January 2018 and RM200 million on 1 July 2018. The unutilised funds were temporarily invested with a return of 6% per annum, determine the borrowing costs eligible for capitalisation for the year ended 31 December 2018 and consequently the cost of the property as at 31 December 2018. Required: Determine the carrying amount of the property as at 31 December 2018 and prepare the joumal entry to account for the borrowing costs capitalised in 2018. (6 marks) PART B DSP Properties Bhd. has submitted a list of its properties in Malaysia to you so that you can advise them whether the properties should be accounted for within the scope of MFRS 140 Investment Properties or MFRS 116 Property, Plant and Equipment. The following is the list of properties held by DSP Properties Bhd, as at 1 January 2019: (a) A seven-storey building in Kuala Lumpur and the whole building is leased out to its subsidiary Suria Bhd. for five years, (b) A five-storey building in Johor Bahru which have been used in production and supply of goods. (c) DSP Properties Bhd, owns a ten-storey building in Taiping and uses the building to operate a hotel. It provides cleaning, maintenance and security services which are considered significant services to the hotel guests. (d) DSP Properties Bhd. owns a shopping mall in Melaka. 80% of the mall are sub- leased to the tenants, while another 15% is still actively search for a new tenant. The remaining part of the mail is used for an administrative work by DSP employees. DSP Properties Bhd. provides cleaning, maintenance and security services which are considered insignificant services for the mall. Required: Advise the company on the appropriate accounting treatment for its properties in accordance with the relevant MFRSs. (7 marks) PART C a. Abu Bakar, a contractor, enter into a contract with Cellen, to construct a factory building. A contract modification arises when Cellen requests for an annexure office block to be built next to the factory. The price of this annexure is negotiated separately. How to account for the modification? (3 marks) b. In another contract, the same contractor, Abu Bakar designs and builds a house for a new house owner, Jessy. Abu Bakar is responsible for the overall management of the project and identifies various goods or services that are provided, including architectural design, site preparation, construction of the house, plumbing and electrical services and finished carpentry. How many performance obligations are in the contract? (3 marks) c. Husboom Ent. sells energy drinks to 24/7 convenience stores. Husboom Ent. also pays the store a fee to ensure that its products receive prominent placement on store shelves. The fee is negotiated as part of the contract for sale of the energy drinks. How should Husboom Ent. account for the slotting fees paid to the stores? (3 marks) d. Briefly state the 5-step model of MFRS 15 in recognising revenue

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