Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help me with this question. (Total: 18 marks) QUESTION 2 PART A Jigjaz Berhad borrowed RM 12 million on 1 January 2017 with the

please help me with this question.

image text in transcribedimage text in transcribed
(Total: 18 marks) QUESTION 2 PART A Jigjaz Berhad borrowed RM 12 million on 1 January 2017 with the purpose to finance the construction work of a machinery, qualifying asset. It is expected that the construction of machinery will take three years to complete, commencing from 1 January 2017. The total expenditure incurred per year were as follows: Date RM 1 January 2017 6.000,000 1 April 2018 4.000,000 1 July 2019 2.000,000 Interest on the loan was 5% per annum. The company invested the unutilised fund for a return of 3% per annum. Required: Compute the borrowing cost eligible for capitalisation and the cost of the machinery for the years ended 31 December 2017, 31 December 2018 and 31 December 2019.PART B Viga Berhad purchase a property on 1 January 2016 for investment purpose. The property comprised of a freehold land and a 20-storey building for RM 70 million. At the date of purchase, the cost of the land was RM 20 million and the estimated useful life of the building was 20 years. It is the policy of the company to depreciate its assets using straight line method. The company adopts fair value model to measure its investment properties. The following transactions took place: Date Details 1 January 2016 Renovation cost was RM 10 million. 30 June 2016 The renovation was completed. 1 July 2016 Due to the change in administration, 4 stories of the building were used for corporate warehouse while the rest were rented out to retailers. 1 January 2017 The land and buildings were revalued to RM 22 million and RM 58 million respectively. 1 January 2019 The retailers terminated the rental contract. Viga Berhad rented out the 16 stories of the building to its subsidiary. The fair value of the land and building were RM 23 million and RM 70 million respectively. Required: Prepare the relevant journal entries of the land and building from year 2016 to 2019 in the account of Viga Berhad and its group

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Financial Numbers Game

Authors: Charles W Mulford, Eugene E Comiskey

1st Edition

0471770736, 9780471770732

More Books

Students also viewed these Accounting questions