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Question 2 Gold Berhads primary business activities are purchasing and selling properties. In January 2012, the company purchased 15 buildings from another real estate company

Question 2

Gold Berhads primary business activities are purchasing and selling properties. In January 2012, the company purchased 15 buildings from another real estate company for the price of RM320,000 each. Gold Berhad plans to sell six of these buildings for RM440,000 each, retain two of them as administrative offices and rent out the remaining 7 buildings at RM3,000 per month in order to earn rental income. At the end of 2012, market research showed that the fair value of these buildings declined to RM210,000.

Required: Draft a short memorandum to the Managing Director of Gold Berhad that shows an explanation of the required MFRS accounting treatment of these properties in Gold Berhads financial statements. In your explanation, you should also briefly discuss the treatment of investment properties under MFRS 140 Investment Property

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