This question is related with MFRS116
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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This question is related with MFRS116
![4. Tom Cruise operates a low-cost air transport system. One of its aeroplanes
was acquired on 1 January x2 for a total cost of RM400 million. The plane's
components are as follows:
Component
Cost RM million
Useful life
COMA
Engine
120
3 years
Body
Furniture and fittings
500
10 years
120
5 years
On 1 January x4, 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 RM150 million. The expected life of the new engine
was determined
be four years.
At the same time the company did a limited upgrade to its furniture and
fittings at a cost of RM50 million. The remaining life of the furniture and
fitting was revised to eight years as at 1 January x4. It completed repainting
the aeroplane at a cost of RM5 million.
Required:
Calculate the depreciation charge for the year ended 31 December x4 and
disclose the carrying amount of the plane.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ba5dc02-8595-484a-a1d7-804363382244%2F462e6625-6fec-4a7e-99a3-90324943bc55%2F9w7jqjw_processed.png&w=3840&q=75)
Transcribed Image Text:4. Tom Cruise operates a low-cost air transport system. One of its aeroplanes
was acquired on 1 January x2 for a total cost of RM400 million. The plane's
components are as follows:
Component
Cost RM million
Useful life
COMA
Engine
120
3 years
Body
Furniture and fittings
500
10 years
120
5 years
On 1 January x4, 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 RM150 million. The expected life of the new engine
was determined
be four years.
At the same time the company did a limited upgrade to its furniture and
fittings at a cost of RM50 million. The remaining life of the furniture and
fitting was revised to eight years as at 1 January x4. It completed repainting
the aeroplane at a cost of RM5 million.
Required:
Calculate the depreciation charge for the year ended 31 December x4 and
disclose the carrying amount of the plane.
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