QUESTION 1 Reda Bhd is a company engaging in palm oil plantation which is based in Pahang. On 1 January 2010, the company acquired a factory building and a machine at a cost of RM4,000,000 and RM800,000 respectively. The estimated useful life of the factory building and the machine were as follows: Factory building 50 years Machine 20 years Depreciation for all the assets is computed based on the straight-line method. The company applied the revaluation model for all its property, plant and equipment. The followings are the relevant information of the machine and the factory building. Machine On 30 November 2014, the operation manager of the company has proposed to the board of directors, a new machine to replace the old machine. The new machine is equipped with the latest technology which can increase the production capacity of the company. In line with this decision, the company decided to conduct impairment test for the old machine. As at 31 December 2014, Reda Bhd received a few offers from other factories to purchase the available machine at RM500,000. Disposal cost for the machine is RM50,000. The value in use is approximately RM750,000. Factory building At the end of 2016, the carrying value of the factory building was as follows: RM Net revalued amount as at 31 December 2014 4,500,000 Accumulated depreciation (From year 2015 to 2016) (200,000) Impairment loss as at 31 December 2016 (600,000) Carrying value as at 31 December 2016 3.700,000 The factory building was revalued on 31 December 2014 at RM4,500,000. During the year 2019, there were indications that the impairment loss recognised in 2016 may have been reversed. The estimated recoverable amount is RM4,300,000 Required: a Explain briefly the followings: The meaning of an impaired asset. i. (2 marks) Any three (3) favourable effects on the value of an asset that may lead to a reversal of impairment loss. (3 marks) b. Calculate the followings: i. The impairment loss for the machine as at 31 December 2014. (6 marks) ii. The amount of the reversal of impairment loss to be recognised in the Statement of Profit or Loss for the factory building as at 31 December 2019. Show all workings. (9 marks) C. Prepare the journal entries to record the reversal of impairment loss for the factory building as at 31 December 2019. (5 marks) Please round up your answer to the nearest RM. (Total: 25 marks)