Transaction $4$

Penaga Indah has a machine with a cost of RM$700,000.$ This machine is used in the company's

operation and is expected to be used only for the next three years. The company estimates the

present value of net cash flow from the machine is about RM$300,000,$ and the fair value less cost

to sell is RM$280,000.$ The accumulated depreciation of the machine until September $30,2023,$

amounted to RM$200,000.$

Required:

a$)$ Explain the suitable accounting treatment for the given situation. The answer must be

supported with appropriate journal entries $($if any$)$ and an explanation of its effect on the

Statement of Financial Position and Statements of Profit or Loss and Other

Comprehensive Income for the current year.

b$)$ On November $15,2023,$ the company sold the machine. Prepare the journal entry to

record the disposal of the machine, assuming that the company received cash RM$290,000$

from the sale of the machine. Assumes that the company charged a full$-$year depreciation

in the year an asset was acquired and no depreciation in the year the asset was sold.