Tina Aisyah Sdn. Bhd paid RM9,000,000 on 1 January 2016 to purchase a building for capital appreciation. The fair value of the building on 31 December 2016 and 31 December 2017 were RM16,000,000 and RM11,000,000, respectively. On 30 June 2018, Tina Aisyah Bhd decided to use this building as an administrative office. The remaining useful life of the office building on 30 June 2018 is 8 years. The fair value of the building on 30 June 2018 was RM14,000,000. However, due to financial problem, Tina Aisyah Bhd sold this building on 30 June 2019 for RM15,500,000. Tina Aisyah Sdn. Bhd adopted fair value model for investment property and revaluation model for owner occupied property. The straight-line method has been used by Tina Aisyah Bhd to calculate depreciation for the fixed asset. Tina Aisyah Sdn. Bhd closes its account on 31 December every year. REQUIRED: Prepare all journal entries for the year 2016, 2017, 2018 and 2019. After initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Explain these two models. Explain the derecognition of investment property.
Tina Aisyah Sdn. Bhd paid RM9,000,000 on 1 January 2016 to purchase a building for capital appreciation. The fair value of the building on 31 December 2016 and 31 December 2017 were RM16,000,000 and RM11,000,000, respectively. On 30 June 2018, Tina Aisyah Bhd decided to use this building as an administrative office. The remaining useful life of the office building on 30 June 2018 is 8 years. The fair value of the building on 30 June 2018 was RM14,000,000. However, due to financial problem, Tina Aisyah Bhd sold this building on 30 June 2019 for RM15,500,000. Tina Aisyah Sdn. Bhd adopted fair value model for investment property and revaluation model for owner occupied property. The straight-line method has been used by Tina Aisyah Bhd to calculate depreciation for the fixed asset. Tina Aisyah Sdn. Bhd closes its account on 31 December every year. REQUIRED: Prepare all journal entries for the year 2016, 2017, 2018 and 2019. After initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Explain these two models. Explain the derecognition of investment property.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tina Aisyah Sdn. Bhd paid RM9,000,000 on 1 January 2016 to purchase a building for capital appreciation. The fair value of the building on 31 December 2016 and 31 December 2017 were RM16,000,000 and RM11,000,000, respectively. On 30 June 2018, Tina Aisyah Bhd decided to use this building as an administrative office. The remaining useful life of the office building on 30 June 2018 is 8 years. The fair value of the building on 30 June 2018 was RM14,000,000. However, due to financial problem, Tina Aisyah Bhd sold this building on 30 June 2019 for RM15,500,000. Tina Aisyah Sdn. Bhd adopted fair value model for investment property and revaluation model for owner occupied property. The straight-line method has been used by Tina Aisyah Bhd to calculate
REQUIRED:
- Prepare all
journal entries for the year 2016, 2017, 2018 and 2019. - After initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Explain these two models.
- Explain the derecognition of investment property.
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