Rose Bhd

On 1 January 2019, Rose Bhd purchased a 3-storey building costing RM800,000 for cash. On the same date, Rose Bhd decided to occupy the second and third floor of the building for its business purpose and decided to rent out the first floor to Mak Kiah Bhd. Each floor of the building can be sold separately. The estimated useful life of the building is 40 years.

Who knew making nasi lemak can earn you this much moolah!!!!

Taking charge of her own destiny, the idea of earning up to RM400,000 a month did not occur to Mak Kiah as she began her Nasi Lemak business 10 years ago. Mak Kiah spoke of how the idea of opening up a small stall was triggered by her husband at the time. The idea came from my husband, at the time I was working with my late mother at a small stall. From then on, my husband wanted me to expand the business by selling Nasi Lemak in Kampung Pandan. I began with just a kilo of rice. It was sold out and I had to add more in the days to come. It was from this moment on, Mak Kiah grew serious about her business.

It began in 2009 with a capital of RM3,000. I started to become consistent and careful with the money that I have spent. In the end, I opened a roadside stall with 20 employees.

As business grew, she began to purchase trucks to help with logistics and sought the help of Food Panda to help boost her business. Now, her Nasi Lemak garnered the attention of local and international media.

As part of her business expansion planning, on 1 August 2017, Rose Bhd commenced a project to construct her own building that was expected to take 3 years to complete. To finance the project, Rose Bhd has took a bank loan of RM10,000,000 at 10% interest per annum on 1 October 2018 for a period of 2 years. On the same date, Rose Bhd has banked the cash and earned interest of RM30,000 for the year end 2018 and RM180,000 for the year end 2019. Due to shortage of materials and bad weather condition, the construction was suspended from 1 July 2019 until 31 October 2019. The construction was completed on 31 July 2020.

The top 10 muslimah entrepreneur

Rose Bhd is a very well-known for the cosmetics line in Malaysia. Rose has been developed by Rose Bhd since 2010 and has sky rocketed into the hearts of many women until today.

With beauty items such as Rose Cantik, Rose Jelita and Rose Ayu as well as the makeup line which includes matte lipsticks, blusher, pressed cake powders and many more. There is practically everything for a woman who wants to look good. Rose is not only certified Halal by Jakim, but it is also quite affordable. Rose is obviously more than just a catchy name, it is a product that sells faster than you can say Bukan Cinta Biasa because indeed this aint no ordinary love.

In order to expand its business in Malaysia, Rose Bhd has acquired a special machine to produce a famous scarve brand Mienie costing RM500,000. The special machine was purchased on 1 July 2019 and has an estimated useful life of 10 years. A government grant of RM50,000 was received to finance part of the purchase.

Rose Bhd is currently planning to diversify its makeup line by introducing new glowing serum. The five workers recruited were send for an intensive training on 1 July 2020 to ensure that they were able to produce high quality serum with approved ingredients. Rose Bhd paid RM3,000 for each of the five workers training fees. Rose Bhd is planning to capitalise the training expenditure as the companys intangible asset.

On 1 August 2020, Rose Bhd acquired new equipment with useful life of 10 years to be used for research and development of its product. The cost of the equipment is SGD 50,000. The company paid SGD 25,000 as part of the settlement on 31 December 2020. The exchange rates are provided as follows:

01/08/2020 : RM1 = SGD 3.20

31/12/2020 : RM1 = SGD 3.45

Rose Bhds year end is on 31 December.

Required:

1. Explain the initial and subsequent measurement of foreign currency transactions in accordance with MFRS 121 The Effects of Changes in Foreign Exchange Rates.

2. Based on (14), prepare the journal entries to account for the new equipment.