Whizz Bhd, a manufacturing company entered into a cash-settled share-basedpayment to acquire equipment from Wonder Bhd. Whizz Bhd started negotiation topurchase the equipment on 1 April 2021. It was agreed on 30 May 2021 that thesettlement for the acquisition would be made based on 50,000 shares of Whizz Bhd.The equipment was delivered to Whizz Bhd on 1 August 2021, and the fair value ofWhizz Bhd's, shares on that date was RM5.00 per share. Whizz Bhd received theequipment on 30 September 2021 when the fair value of Whizz Bhd's, shares wasRM4.50 per share. The fair value of Whizz Bhd's, shares on 31 December 2021 wasRM4.30 per share.It was estimated that the equipment would be used for five years and depreciated onmonthly basis.Required:Prepare journal entries on the acquisition of equipment by Whizz Bhd.

The Whizz Bhd. has acquired the equipment from the Wonder Bhd. company on the basis of the…

Answered: Prepare journal entries on the…

Business

Accounting

Prepare journal entries on the acquisition of equipment by Whizz Bhd.

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

Whizz Bhd, a manufacturing company entered into a cash-settled share-based
payment to acquire equipment from Wonder Bhd. Whizz Bhd started negotiation to
purchase the equipment on 1 April 2021. It was agreed on 30 May 2021 that the
settlement for the acquisition would be made based on 50,000 shares of Whizz Bhd.
The equipment was delivered to Whizz Bhd on 1 August 2021, and the fair value of
Whizz Bhd's, shares on that date was RM5.00 per share. Whizz Bhd received the
equipment on 30 September 2021 when the fair value of Whizz Bhd's, shares was
RM4.50 per share. The fair value of Whizz Bhd's, shares on 31 December 2021 was
RM4.30 per share.
It was estimated that the equipment would be used for five years and depreciated on
monthly basis.
Required:
Prepare journal entries on the acquisition of equipment by Whizz Bhd.

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