Recommend the company on the accounting treatment on derecognition of the motor vehicle.
 
 

PART B: PREPARATION OF FINANCIAL STATEMENTS FOR PUBLICATION PURPOSES Bauk Consumer Electrical Berhad manufactures a variety of home electrical equipment in Malaysia. The following is the Trial Balance of the company as at 31 December 2021: Debit Credit RM RM Sales 1,306,800 Cost of sales 562,200 54,800 Selling and distribution expenses Administrative expenses Interim Dividend Interest on loan 100,260 64,800 Interest on debentures x paid Inventories as at 31 December 2021 (at cost) 43,750 16,440 70,400 352,700 Bank 424,248 326,250 1,800,000 880,000 386,000 Intangible asset Land Building (at cost) Machinery (at cost) Motor vehicle (at cost) Accumulated Depreciation (31 December 2020): Building Machinery Motor vehicles Receivables and Payables Allowance for Impairment of Trade Receivable Rental income 1,223,700 440,000 87,320 656,198 131,050 15,430 211,750 57,200 1,300,000 4.5% Bank loan 8% Debentures Retained profit as at 31 December 2020 Ordinary share capital 12% Preference shares capital General reserve 411,000 422,300 1,200,000 330,000 60,000 100,000 6,517,298 Assets Revaluation Reserve as at 31 December 2020 6,517,298 You are given the following information: 1. The information related to the property, plant and equipment of the company is as follows: a. The depreciation policy of the company is as follows: Building Machinery Motor vehicles 5% on cost; yearly basis. 5% on reducing balance; yearly basis. 20% on reducing balance, monthly basis. is not depreciated. Land Note: Depreciation on motor vehicles is treated as selling and distribution expenses while depreciation for other property, plant and equipment to be treated as administrative expenses.