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Prepare extracts of the financial statements of Mega Consultancy in respect of the two properties for the year to 31 December x3.

Prepare extracts of the financial statements of Mega Consultancy in respect of the two properties for the year to 31 December x3.

FINANCIAL ACCOUNTING
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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This question related with MFRS 116 (property,plant and equipment).

10. Mega Consultancy conducts its activities from two properties, a head office in Kuala Lumpur and another property in Kajang used as a staff training centre. Both properties were acquired on 1 January xl and their economic lives were estimated to be 25 years with no residual value. Mega Consultancy has a policy of treating its land and buildings as separate assets and carrying them at fair value. On 30 June x3, the fair values of the properties are as follows: Land Building RM RM Head office Cost at 1.1.x1 1,000,000 2,400,000 Fair value at 30.6.x3 1,400,000 2,700,000 Training centre Cost at 1.1.x1 600,000 1,800,000 Fair value at 30.6.x3 700,000 1,600,000 The training centre was damaged due to flash floods. The valuer stated that the expected useful life of the training centre based on its current use will be another ten years only. The expected useful life of the head office remains unchanged. Required: Prepare extracts of the financial statements of Mega Consultancy in respect of the two properties for the year to 31 December x3.
Transcribed Image Text:10. Mega Consultancy conducts its activities from two properties, a head office in Kuala Lumpur and another property in Kajang used as a staff training centre. Both properties were acquired on 1 January xl and their economic lives were estimated to be 25 years with no residual value. Mega Consultancy has a policy of treating its land and buildings as separate assets and carrying them at fair value. On 30 June x3, the fair values of the properties are as follows: Land Building RM RM Head office Cost at 1.1.x1 1,000,000 2,400,000 Fair value at 30.6.x3 1,400,000 2,700,000 Training centre Cost at 1.1.x1 600,000 1,800,000 Fair value at 30.6.x3 700,000 1,600,000 The training centre was damaged due to flash floods. The valuer stated that the expected useful life of the training centre based on its current use will be another ten years only. The expected useful life of the head office remains unchanged. Required: Prepare extracts of the financial statements of Mega Consultancy in respect of the two properties for the year to 31 December x3.
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