Question 3On 1 January 20X1, the risks and rewards of ownership of a new Lear jet passed to FlightBhd. The jet, which is to provide international mobility to the company's most seniorexecutives, cost RM40 million (excluding tax). The company intends keeping the jet until it isobsolete (i.e. 20 years) at which time it is expected to have no residual value. Although theinvoice did not provide an analysis of the purchase price, it can reasonably be allocated asfollows:RMComponentsenginesAdditional information:20,000,000 Estimated useful life 10 years with noresidual value14,000,000 Estimated useful life 20 years with noresidual valueairframeFurniture and fittings4,000,000 Estimated useful life 5 years with noresidual value2,000,000 Such inspections are required by aviationauthorities every two yearsInspection costs40,000,000Additional information:On 30 June 20X2, for reasons of convenience, the company undertook the requisiteinspection six months earlier than required by the aviation authorities. The cost of theinspection was RM2 200 000 and the next scheduled inspection is 30 June 20X4.Required:(a) Compute the amount of depreciation to be expensed by Flight Limited in respect ofthe jet for the year ended 31 December 20X1.(b) Briefly outline how Flight Bhd shall account for the inspection cost during 20X2, inaccordance with MFRS 116 Property, plant and equipment.

Name: Question 3On 1 January 20X1, the risks and rewards of ownership of a
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Description: Question 3On 1 January 20X1, the risks and rewards of ownership of a new Lear jet passed to FlightBhd. The jet, which is to provide international mobility to the company's most seniorexecutives, cost RM40 million (excluding tax). The company intends

Depreciation is a charge which is charged on the fixed asset by the company. It is an expenses which…

Business

Accounting

(a) Compute the amount of depreciation to be expensed by Flight Limited in respect of the jet for the year ended 31 December 20X1. (b) Briefly outline how Flight Bhd shall account for the inspection cost during 20X2, in accordance with MFRS 116 Property, plant and equipment.

(a) Compute the amount of depreciation to be expensed by Flight Limited in respect of the jet for the year ended 31 December 20X1. (b) Briefly outline how Flight Bhd shall account for the inspection cost during 20X2, in accordance with MFRS 116 Property, plant and equipment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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