This question related with MFRS 116 (property,plant and equipment). 10. Mega Consultancy conducts its activities from two properties, a headoffice in Kuala Lumpur and another property in Kajang used as a stafftraining centre. Both properties were acquired on 1 January xl and theireconomic lives were estimated to be 25 years with no residual value. MegaConsultancy has a policy of treating its land and buildings as separateassets and carrying them at fair value. On 30 June x3, the fair values of theproperties are as follows:LandBuildingRMRMHead officeCost at 1.1.x11,000,0002,400,000Fair value at 30.6.x3 1,400,0002,700,000Training centreCost at 1.1.x1600,0001,800,000Fair value at 30.6.x3700,0001,600,000The training centre was damaged due to flash floods. The valuer statedthat the expected useful life of the training centre based on its current usewill be another ten years only. The expected useful life of the head officeremains unchanged.Required:Prepare extracts of the financial statements of Mega Consultancy in respectof the two properties for the year to 31 December x3.

Extracts of Financial statements of Mega Consultancy. Land (both) - Still the same as of June 30.…

Answered: Prepare extracts of the financial…

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

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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Question

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.

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