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Question 1 (a) Prepare the journal entries for Energy Bhd for its transaction in the year 2017 and 2018. (b) Prepare the journal entries for Energy Bhd when it sold both properties in the year 2019. (c) After the initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Briefly explain TWO (2) differences between these two models.

Question 1 (a) Prepare the journal entries for Energy Bhd for its transaction in the year 2017 and 2018. (b) Prepare the journal entries for Energy Bhd when it sold both properties in the year 2019. (c) After the initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Briefly explain TWO (2) differences between these two models.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question 1

(a) Prepare the journal entries for Energy Bhd for its transaction in the year 2017 and 2018.

(b) Prepare the journal entries for Energy Bhd when it sold both properties in the year 2019.

(c) After the initial recognition, MFRS 140 Investment Property requires an entity to choose

either the cost model or fair value model as its accounting policy. Briefly explain TWO

(2) differences between these two models.

WPS Office P Topic 4 Invest..erties-Revised P MC4 Investmen.nts)_A202.pdf Q X P TUTORIAL 2 -Question.pdf P topic_4.pptx + Sembag. O Go Premium = Menu v Home Insert Comment Edit Page Protect Tools IK QUESTION 1 Energy Bhd (EB) acquired a piece of land and a building on 1 January 2017 at the cost of RM6,000,000 and RM8,000,000 respectively. EB decided that the acquisition of land is for long term capital appreciation. As for the building, it was planned to be rented out to its wholly subsidiary, Imperial Bhd. The fair value of land and building on 31 December 2017 was RM9,000,000 and RM6,000,000 respectively. On 31 August 2018, due to insufficient working space, EB decided to terminate the rental agreement with its subsidiary and used the building for administrative use. The building was expected to have a remaining useful life of 10 years. The fair value of the building on 31 August 2018 was RM14,000,000. Unfortunately, due to liquidity issues, EB sold both land and building on 30 April 2019 for RM15,500,000 and RM12,500,000 respectively. EB adopted a fair value model for investment property and revaluation model for owner-occupied property. EB depreciates its non-current assets using the straight-line method and closes its account on 31 December each 3E year. REQUIRED: (Round all numbers to the nearest RM) (a) Prepare the journal entries for Energy Bhd for its transaction in the year 2017 and 2018. (b) Prepare the journal entries for Energy Bhd when it sold both properties in the year 2019. After the initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Briefly explain TWO (2) differences between these two models. (c) 2/ > >I 80 00 125% - >
Transcribed Image Text:WPS Office P Topic 4 Invest..erties-Revised P MC4 Investmen.nts)_A202.pdf Q X P TUTORIAL 2 -Question.pdf P topic_4.pptx + Sembag. O Go Premium = Menu v Home Insert Comment Edit Page Protect Tools IK QUESTION 1 Energy Bhd (EB) acquired a piece of land and a building on 1 January 2017 at the cost of RM6,000,000 and RM8,000,000 respectively. EB decided that the acquisition of land is for long term capital appreciation. As for the building, it was planned to be rented out to its wholly subsidiary, Imperial Bhd. The fair value of land and building on 31 December 2017 was RM9,000,000 and RM6,000,000 respectively. On 31 August 2018, due to insufficient working space, EB decided to terminate the rental agreement with its subsidiary and used the building for administrative use. The building was expected to have a remaining useful life of 10 years. The fair value of the building on 31 August 2018 was RM14,000,000. Unfortunately, due to liquidity issues, EB sold both land and building on 30 April 2019 for RM15,500,000 and RM12,500,000 respectively. EB adopted a fair value model for investment property and revaluation model for owner-occupied property. EB depreciates its non-current assets using the straight-line method and closes its account on 31 December each 3E year. REQUIRED: (Round all numbers to the nearest RM) (a) Prepare the journal entries for Energy Bhd for its transaction in the year 2017 and 2018. (b) Prepare the journal entries for Energy Bhd when it sold both properties in the year 2019. After the initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Briefly explain TWO (2) differences between these two models. (c) 2/ > >I 80 00 125% - >
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