QUESTION $2$

On $1$ January $2022,$ the book value balances of the property, plant and equipment section of

Seluang Padu Bhd$\text{'}$s are as follows:

During $2022,$ the following transactions occurred:

$5$ January $2022$

Land with a small building was acquired by issuing $6,000$ units of shares. Seluang Padu Bhd

share is actively traded. The market value of the share was RM$150$ per share. Shortly after the

acquisition, small building was demolished at a cost of RM$25,000.$ Another cost of RM$7,000$

was incurred to clear the land. The cost of RM$26,000$ was paid for paving the parking lots and

another RM$7,000$ for fences. Both parking lots and fences have an estimated useful life of $10$

years and the straight line method is used to depreciate the asset. Additionally, Seluang Padu

Bhd paid RM$3,000,$ RM$1,000$ and RM$20,000$ for commission on real estate agent, fee for title

search and lawyer's fee to close the purchase deal, respectively.

$1$ June $2022$

A group of new machines was purchased. The invoices price of the machines was RM$150,000.$

Credit terms were $\frac{1}{10},\frac{n}{30},$ FOB shipping point. Transportation cost from the manufacturer

to Seluang Padu Bhd was RM$3,600,$ which included RM$600$ for insurance.

$1$ November $2022$

Seluang Padu Bhd bought an equipment and paid a total of RM$605,800.$ The supplier's invoice

showed that this sum was made up of the following items:

REQUIRED:

$($a$)$ Based on MFRS $116$ Property, Plant and Equipment, calculate the cost of land, land

improvement, machine and equipment.

$($b$)$ Prepare the journal entries to record the acquisition of land, land improvement, machine

and equipment in accordance with MFRS $116$ Property, Plant and Equipment. Show

your workings.