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

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

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).

6. XYZ Bhd has three pieces of land and the detailed information is as follows: Cost Revaluation as at end of year Acquired in year 1 3 6. 9. A RM700,000 RM400,000 RM800,000 RM900,000 RM1,200,000 RM1,500,000 RM1,400,000 RM1,600,000 C RM800,000 RM900,000 RM1,200,000 Sold for RM1,400,000 The entity adopts the fair value method in the accounts. Required: Show the revaluation reserve and the profit and loss extract for each of the three years. 7. Ray acquired a property on 1 January x2 at a cost of RM960,000. Expected useful life is 24 years. The company policy is to revalue its properties to their market values at the end of each year. Accumulated depreciation is eliminated and the property is restated to the revalued amount. Annual depreciation iş calculated on the carrying amount at the beginning of the year. The market values of the property on 31 December x3 and x5 were RM1,100,000 and RM750,000, respectively. The existing balance on the revaluation reserve is RM200,000 which is related to some non-depreciable land whose value has not changed significantly since 1 January x2. Required: Prepare extracts of the financial statements of Ray (including revaluation reserve) for the years x2 to x6.
Transcribed Image Text:6. XYZ Bhd has three pieces of land and the detailed information is as follows: Cost Revaluation as at end of year Acquired in year 1 3 6. 9. A RM700,000 RM400,000 RM800,000 RM900,000 RM1,200,000 RM1,500,000 RM1,400,000 RM1,600,000 C RM800,000 RM900,000 RM1,200,000 Sold for RM1,400,000 The entity adopts the fair value method in the accounts. Required: Show the revaluation reserve and the profit and loss extract for each of the three years. 7. Ray acquired a property on 1 January x2 at a cost of RM960,000. Expected useful life is 24 years. The company policy is to revalue its properties to their market values at the end of each year. Accumulated depreciation is eliminated and the property is restated to the revalued amount. Annual depreciation iş calculated on the carrying amount at the beginning of the year. The market values of the property on 31 December x3 and x5 were RM1,100,000 and RM750,000, respectively. The existing balance on the revaluation reserve is RM200,000 which is related to some non-depreciable land whose value has not changed significantly since 1 January x2. Required: Prepare extracts of the financial statements of Ray (including revaluation reserve) for the years x2 to x6.
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