5. Pacific Cruise operates cruise ships that ply the Straits of Malacca. One of its ships was acquired on 1 January x2 for a total cost of RM400 million. The ship's components are as follows: Component Engine Cost RM million Useful life 80 5 years Hull and decks 200 25 years Furniture and fittings 120 10 years On 1 January x5, it was discovered that there was an unexpected level of engine trouble and the company decided to replace the engine with a new engine at a cost of RM120 million. The expected life of the new engine is determined to be six years. At the same time the company did a limited upgrade to its furniture and fittings at a cost of RM30 million. The remaining life of the furniture and fitting was revised to ten years as at 1 January x5. It completed repainting the ship at a cost of RM5 million. Required: Calculate the depreciation charge for the year ended 31 December x5 and disclose the carrying amount of the ship.

5. Pacific Cruise operates cruise ships that ply the Straits of Malacca. One of its ships was acquired on 1 January x2 for a total cost of RM400 million. The ship's components are as follows: Component Engine Cost RM million Useful life 80 5 years Hull and decks 200 25 years Furniture and fittings 120 10 years On 1 January x5, it was discovered that there was an unexpected level of engine trouble and the company decided to replace the engine with a new engine at a cost of RM120 million. The expected life of the new engine is determined to be six years. At the same time the company did a limited upgrade to its furniture and fittings at a cost of RM30 million. The remaining life of the furniture and fitting was revised to ten years as at 1 January x5. It completed repainting the ship at a cost of RM5 million. Required: Calculate the depreciation charge for the year ended 31 December x5 and disclose the carrying amount of the ship.

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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