Question 2 Casio Robotic Manufacturing purchased an item of plant. The details are as follows: RM List price 1,200,000 Trade discount 10% Shipping and handling 16,000 Pre-production testing 25,000 Maintenance for four years 60,000 Site installation 70,000 Casio had settled the amount due to the vendor within the credit period and obtained a 2% early settlement discount on the purchase price. The plant is expected to last for five years, at the end of which Casio will incur compulsory dismantling and site restoration costs of RM15,000. The present value of RM1 in five years time is RM0.75, using a discount rate of 6%. The residual value of the plant is estimated at RM26,000. Required: (a) Calculate the amount that will be recognized as plant. (8 marks) (b) Calculate the depreciation expense for the year and carrying amount of the plant as at the end of year 1. Show the relevant figures as extract of Statement of Profit or Loss and Statement of Financial Position. (4 marks) (c) What are the recognition criteria for property, plant and equipment? (4 marks) (d) According to MFRS 116, what choices of measurement model exist subsequent to assets being initially recognised? (3 marks) (e) Assume on the third year, there was a major change in the companys management. The board was discussing on the plant operation. The plant could be sold for RM480,900 and has an estimated value in use of RM410,500. Advise the board on the treatment of the above, giving reasons and showing how the resulting figures would be shown in the financial statements. (8 marks) (Total: 25 marks)