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    Mini Case 3

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    Mini Case 3

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    27 views7 pages

    Mini Case 3

    Uploaded by

    ying hui

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    © All Rights Reserved
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    BKAR1013 Financial Accounting and Reporting I

    First Semester 2018/2019 (A181)


    Kumpulan E

    MINI CASE 3

    Prepared For:
    Dr. Zakiyah Binti Sharif

    Prepared By:
    OH YING HUI
    254475
    Mini Case 3
    Question 1
    A. Current assets are described as the company plans to use up or convert into cash
    within one year from the reporting date such as account receivable and bank.
    Non-current assets are described as the long-term in nature and usually depreciated
    such as Land and Equipment.

    B.
    Item Land Land Buildings Other
    Improvement Accounts
    1. RM560,000
    (Notes payable)
    2. RM560,000.
    3. RM50,000.
    4. RM60,000.
    5. (RM10,000)
    6. RM48,000
    7. RM315,000.
    8. RM60,000.
    9. RM40,000.
    10. (RM30,000.)
    11. RM20,000
    12 RM28,000.
    13. RM10,000

    Question 2:

    COSTS RM
    Cost of material to construct PQ machine 100,000
    Labour cost to construct PQ machine 50,000
    Allocated overhead costs 25,000
    Allocated financing costs, recognised to be capitalised 16,000
    Cost of installation 20,000
    Safety inspection costs prior to use 4,000
    Total cost of machine PQ 215,000

    Question 3:

    No. Account Titles Debit Credit


    1. Machinery A 78,000
    Equipment A 26,000
    Cash 104,000
    2. Equipment 25,000
    Contributed share capital 25,000
    3. Equipment 15,000
    Account Payable 15,000
    Account Payable 15,000
    Cash 15,000
    4. Machine (B) 200,000
    Notes Payable 200,000
    Down Payment 50,000
    Cash 50,000
    Instalment (48778 x 3.605) 175,845
    Cash 175,845

    Question 4

    (i) Cost of
    Land : RM
    Purchase
    Price 560,000

    Demolished Old Building 43,000


    Proceed from the sale of old
    building (56,000)
    Cost of land clearing 37,500

    Trees and other landscaping 34,000

    618,500

    (ii) Cost of Building :


    Excavation
    Fees 52,100

    Architectural design fees 77,900

    Building permit fees 4,600


    Cost of
    construction 430,400

    Temporary house for workers 25,000


    6-month superintended salary
    guarding 25,000

    615,000

    (iii) Cost of Land Improvement :

    Parking lots, streets and side walk 36,700

    Fences around the building 50,000

    86,700
    (b)

    Cost allocated to machine :


    = (78750 / 90000 ) x 80,000

    = RM70,000

    Cost of Machine 70,000


    Installation cost 18,000
    Safety Inspection cost 9,000
    Total cost of machine 97,000

    Cost allocated to equipment :


    = 11250 / 90000 ) x 80,000

    = RM10,000

    Content Debit (RM) Credit (RM)


    Machine 97000
    Equipment 10000
    Cash 22000

    Distributed Share Capital 85000


    ( Purchased Machine and Equipment)

    (c )

    Accumulated Depreciation :
    = ( 181000 - 15000 ) / 10 x 8

    = RM132,800

    Cost of Old Crane 181000


    (-) Accumulated Depreciation -132800

    Book Value 48200

    Fair value of old crane 56000

    (-) Book Value -48200


    Gain on disposal asset 7800

    Cash
    paid 154000
    Fair Value of old crana 56000

    Cost of new crane 210000


    Debit
    Date Content (RM) Credit (RM)

    Jun-16 New crane 210000

    Accumulated Depreciation 132800


    Old
    crane 181000

    Cash 154000
    Gain on disposal asset 7800
    (Exchange old crane to new crane )

    Question 5
    (a)

    RM

    Manufacturer's list price 380,000

    (-) Trade discount (38,000)

    342,000

    Delivery charge 6,800

    Installation costs 29,600


    Start-up and related pre-production
    costs 15,000

    393,400

    Maintenance fees charge, small spare part and the pre-payment of the insurance are considered
    as expenses and cannot be treated as a part of assets cost. It only can recognized expenses which
    help to make the machine ready to be used as cost of assets, other than that will be recognized
    as expenses.

    (b)

    Cost of Land : RM
    Purchase price 2,800,000

    Legal fees 200,000

    Cost of Demolition 150,000

    Cost of permanent tree planting 50,000

    Insurance 24,000

    3,224,000

    Cost of New factory RM

    Land Survey 12,000

    Cost of drawing new factory plan 80,000

    Insurance 13,000

    Building permit fees 10,000

    Cost of construction 1,500,000

    1,615,000

    (c )

    Cost of building 15000000


    (-) Accumulated Depreciation (3500000)

    Book Value 11500000

    Fair value of building 20000000

    (-) Book Value (11500000)


    Gain on disposal asset 8500000

    Cost of new building RM

    Cash payment 5,000,000

    Fair value of old building 20,000,000

    25,000,000
    Debit
    Content (RM) Credit (RM)

    Building (new) 25000000

    Accumulated Depreciation 3500000

    Building (old) 15000000

    Cash 5000000
    Gain on disposal asset 8500000

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