TEST JUL2020 solution - test for upcoming tesst PDF

Preview

Summary

test for upcoming tesst...

Description

A(i) Sp. Machine date 2019 Jan 1 Right of use - machine Lease liability

2019 Dec 31

Debit RM 34,800

34,800

Lease liability Bank

10,000

Finance cost (34,800 – 10,000)  x 10% )

2,480

10,000

Lease liability Depreciation- right of use asset  (34,800 / 4)  Accumulated depreciation

Credit RM

2,480 8,700 8,700 (15 x 1 marks = 15 marks)

SOLUTION 2 (a) 

On 1 January 2019, there is an indication the machine was impaired. 



An asset is impaired when the carrying amount of the asset exceed its recoverable amount. 



The assets shall be measured at the lowest of the asset’s carrying amount and its recoverable amount. 



The carrying amount of the asset at the point of time where there is an indication of impairment was RM 675,000 (900,000 – (45,000 x5)) 



Meanwhile the recoverable amount will be valued based on the highest of Fair value less cost to sell (RM600,000) and its value in use (RM620,000). In this situation, the recoverable amount will be based on value in use which is RM 620,000. 



Since the carrying amount exceed its recoverable amount. Impairment loss of RM55,000 (675,000 – 620,000) need to be recognized during the year in statement of profit or Loss as an expense.  (6  x 1 mark = 6 marks)

Solution 2 (b)

Impairment loss Accumulated impairment loss Depreciation (620,000 /15)  Accumulated depreciation 

Debit RM 55,000

Credit RM 55,000

41,333 41,333 (9 x 1 mark = 9 marks)...