Redang Chalet Sdn Bhd $($RCSB$)$ rents out a chalet to tourists at a popular beach in Redang, Terengganu. RCSB owns $10$ chalets, of which the construction cost amounted to RM$1$ million. Each chalet is depreciated at $20\%$ per annum. The chalets were completed in January $2021.$

In addition to the chalet, RCSB rents out cars to tourists visiting the island. The cars were bought on $1$ January $2021$ at a total cost of RM$150,000$ and are being written off over a period of five years. In November $2022,$ a major flood hit the island and the demand for cars dropped tremendously. RCSB could only generate RM$80,000$ cash for the balanced two years. Alternatively, RCSB can sell the cars for RM$75,000$ as of $31$ December $2022.$

RCSB$$s chalets are located in a remote area in Redang Beach. As advised by the local Water Council, $10$ water pumps were installed in the area on $1$ January $2022$ to draw fresh water from the dig well. Each pump costs RCSB RM$5,000$ with an estimated useful life of $5$ years. A year later, $5$ of the water pumps were damaged during hailstorms. RCSB has not decided whether they want to sell the damaged water pump as scrap or repair it instead. The scrap value of each of the damaged water pumps as of $31$ December $2022$ is RM$1,000.$

On $1$ January $2021,$ RCSB bought a nearby land where RCSB intends to build its office building. RCSB decided to use the revaluation model. The cost of the land is RM$2$ million. On $31$ December $2021,$ the fair value of the land was RM$2\mathrm{.}2$ million. On $31$ December $2022,$ the value of the land was reduced to RM$1\mathrm{.}9$ million as a result of rat infestation. Clearing and cleaning costs amount to RM$1$ million as of $31$ December $2022.$

RCSB bought several paintings from several local street artists for RM$10,000$ on $1$ February $2022.$ RCSB intends to sell the painting later for capital appreciation but currently, RCSB is unsure about this. All the paintings were placed in the board meeting room. As of $31$ December $2022,$ the fair value of the paintings based on a professional valuer estimate stands at RM$15,000.$ In addition, RCSB bought several antiques for RM$150,000$ in May $2022.$ These antiques were sold for RM$200,000$ in July $2022.$ Another set of antiques was purchased in September for RM$300,000.$ As of $31$ December $2022,$ these antiques were valued at RM$350,000.$ The sales of the antiques were actively advertised in the local newspapers and social media.

RCSB$$s top management made a decision to venture into the agriculture business as another source of income. A piece of land was purchased on $1$ January $2022$ for RM$400,000.$ The clearing cost amounted to RM$50,000.$ RCSB decided to use a revaluation model for this land. RCSB decided to rear cattle. RCSB bought wires and wood to build two barns to house the cattle. The construction of the barns was RM$12,000$ while the cost of the wires and woods amounted to RM$10,000.$ RCSB paid a contractor RM$5,000$ to build the barns. RCSB estimated the useful life of the barns to be $5$ years without any residual value.

On $1$ January $2022,$ RCSB purchased $10$ calves and $10$ kids. The purchase price and fair value of the cattle are stated in the table below. As of $31$ December $2022,$ a calf and a kid died due to foot and mouth disease.

$1$ January $2022$ Purchase Price $($RM$)31$ December $2022$ Fair Value $($RM$)$

A calf $550600$

A kid $250300$

$1-$year old calf $700$

$1-$year old goat $400$

There were $30$ durian trees that RCSB didn$$t clear out when they bought the agricultural land. There was no durian when RCSB bought the land. The market price of these durian trees obtained from a professional valuer was RM$2,000$ each. The useful life of these trees was estimated to be $5$ years. In addition, purchased $50$ durian tree saplings in December $2022$ to be planted at the farm. The trees were purchased as a future source of income. Each of the durian tree saplings costs RM$200.$ RCSB also purchased RM$5,000$ worth of cow grass saplings to be planted at the farm. The cow grass will be used to feed the cattle when the grass matures.

Required:

a$)$ Discuss with examples TWO $(2)$ indicators that may require an entity to reduce the value of their assets in accordance with MFRS$136$ Impairment of Assets.

$(4$ Marks$)$

b$)$ Based on the above, discuss how you would account for the following items by reference to the appropriate approved accounting standards. Support your arguments with reasons.

i$.$ The cars and the water pumps.

ii$.$ The $2$ pieces of land and the clearing cost.

iii. The paintings and the antiques.

iv$.$ The agricultural land, the wires, the woods, and the construction costs of the barns.

v$.$ The calves and the kids.

vi$.$ The durian trees, the durian tree sapling, and cow grass.

$(15$ Marks$)$

c$)$ Based on the relevant approved accounting standards that you have chosen in $($b$),$ journalize each of the transactions that affect RCSB$$s financial records for the years ended $31$ December $2021$ and $31$ December $2022.$ Show all your workings.

$(85$ Marks$)$

d$)$ Prepare an extract of RCSB$$s Statement of Profit or Loss