Question $1$

Rose Megah Bhd$.($RMB$)$ acquired a property on $1$ January $2021$ which RMB intends to sell. The

property was obtained through auction. The property was valued at RM$5$ million. The property was

in a deteriorated condition and repairs were a necessity. RMB intended to complete the repairs

before selling the property. As of $31$ December $2021,$ the fair value of the property was RM$5\mathrm{.}5$

million. Total repair costs amounted to RM$200,000$ and the repairs were completed on $31$ January

The property was later sold for RM$6$ million on $30$ September $2022.$ Depreciation for a

similar type of property is at $10\%$ per annum.

In addition, RMB bought an antique car $-$ Mr$.$ Bean's Car, for RM$100,000$ in May $2022.$ The car

was sold for RM$200,000$ in July $2022.$ Another set of antique cars was purchased in September for

RM$300,000.$ Refurbishment of the car costs RM$20,000.$ RMB actively advertised the cars in local

newspapers and social media. As of $31$ December $2022,$ these cars were valued at RM$350,000.$

Required:

a$)$ Discuss with examples TWO $(2)$ indicators that may require an entity to reduce the value of

their assets under MFRS$136$ Impairment of Assets.

$(4$ marks$)$

b$)$ Based on the above, discuss how you would account for the property and the cars using an

appropriate approved accounting standard. Justify your answers.

$(4$ marks$)$

c$)$ Based on the relevant approved accounting standards that you have chosen in $($b$),$ journalize

each of the transactions that affect RMB$\text{'}$s financial records for the year ended $31$ December

Show all your workings.

$(14$ marks$)$

d$)$ Prepare an extract of RB$\text{'}$s Statement of Profit or Loss for the year ended $31$ December $2022$

and Statement of Financial Position as at $31$ December $2022.$ You are required to show the

summarized figures that incorporate all the items in part $($b$)$ above.

$(8$ marks$)$