Question
The accountant of Landslide Berhad discovered an error in Landslides account during the year to 30 June 2019 where, in July 2017, a building and
The accountant of Landslide Berhad discovered an error in Landslides account during the year to 30 June 2019 where, in July 2017, a building and land were purchased at a total cost of RM20,000,000. The building represents 80% of the cost. However, an error was made by the accountant whereby the whole amount was allocated as cost of the building. The building is depreciated using the straightline basis over 40 years.
It is the policy of the company to depreciate its building on a straight-line basis over 40 years. Depreciation is to be provided based on the period of ownership. Land is not depreciated.
Required: Prepare the adjusting entries for the period up to year ended 30 June 2019. (8 marks)
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