URGENT QUESTION

A) Ima Bhd owns and operates a refinery that cost RM15.6 million since 1 January 2014. It is being depreciated at 10% on cost. On 1 January 2016, the factory was damaged. Repair works are not possible but it can still operate at reduced capacity. The remaining life of the plant is now reduced to only five years.

Based on the reduced capacity, the company expects to generate RM1.5 million cash per annum from 2016 to 2020 but can be disposed for RM6 million. Imaginur was also offered a trade-in value of RM12 million against a replacement factory which had a cost of RM7.5 million. Ima is reluctant to replace the plant. The trade-in value is available only if the plant is replaced.

The pre-tax cost of capital for Ima is 10%.

Required:

With reference to the relevant MFRS, calculate the accumulated depreciation, accumulated impairment and carrying amount of asset to be recognised in Ima financial statements:

1. Immediately before impairment of asset.
2. Immediately after impairment of asset.
3. As at 31 December 2016.
4. State the main standard applicable to the above situation and explain your calculations.
5. marks)

1. B) The following information is provided for Daywalker Bhd.
   1. Year ended 31 December 2014: The issued capital of Daywalker Bhd at 31 December 2014 was RM10 million. Its shares were denominated at RM0.50 each. Daywalkers earnings attributable to its ordinary shareholders for the year ended 31 December 2014 were RM10 million.
   2. Year ended 31 December 2015: On 1 May 2015, Daywalker issued 6 million ordinary shares at full market price. Earnings attributable to its ordinary shareholders for the year ended 31 December 2015 were RM13.2 million.
   3. Year ended 31 December 2016: On 1 April 2016 Daywalker made rights issue of one new ordinary shares at a price of RM2 each for every five ordinary shares held. The offer was fully subscribed. The market price of Daywalker shares immediately prior to the offer was RM5.00 each.
   4. On 1 January 2016, the directors of Daywalker were awarded share options on 24 million ordinary shares exercisable from 1 January 2019 at RM4.00 per share. The average market value of Daywalker ordinary share for the year ended 31 December 2016 was RM6.00. Earnings attributable to its ordinary shareholders for the year ended 31 December 2016 were RM15.7 million.

Required:

Calculate:

1. Basic earnings per share for years 2014, 2015 and 2016 including comparative figures (where relevant).
2. Diluted earnings per share for 2016.

(10 marks)

[Total: 20 marks]