Question

Instruction: Answer ALL Questions 1. Super Printz Sdn Bhd prepares the company year end accounts on 31" December annually. The company has the following assets Date of Assets Useful Cost (RM) purchase life (year) 1-7-2017 Motor Vehicles 100,500 1-1-2018 Equipment 5 142,000 1-1-2018 Labelling Machine 65,000 1-1-2018 Land (3/4 acre) 370,000 Additional information: The following transactions occurred during the year 2019: 1 April : Purchased the second labelling machine, at cost RM25,000 from Auto Smart Label Sdn Bhd Super Printz paid RM5,000 by cash and remaining balance by credit/on account 25 June : Purchased one unit of shop lot office building for RM450,000. The company paid RM45,000 by cheque as deposit and the remaining balance by loan from First Bank 31 Dec: Revaluation of land, RM390,000. 16 The company uses: i) straight line method of depreciation for motor vehicles and equipment. ii) reducing balance method for machine with the rate 10% iii) The company charge no depreciation for asset purchased after day number 15th of the month. All payments and receipts for the above transactions were made through cheque/bank. a) Journaliza the transactions occur in 2019 16m) You are required to prepare: b) Depreciation schedule for all non current assets for the company from year of purchase until 31 December 2019. (8 m) C) Journalize all adjusting entries at the end of the year. ( 8m) d) Prepare the non current assets section in statement of financial position (5 m) e) Explain why assets need to be depreciated. Give TWO(2) reasons (4m) K) MFRS 116 Plant Property and Equipment explain the differences between depreciation, depletion, amortization and impairment. Discuss. (5m)

Answer 1

a)

Date	Particulars	Debit(RM)	Credit(RM)
01-Apr	Labelling machine a/c	25000
	To cash a/c		5000
	To accounts payable a/c		20000
	(being machine purchased from Auto Smart )
25-Jun	Building a/c	450000
	To bank a/c		450000
	(being building purchased and payment made through check and by bank)
	Bank a/c	405000
	To bank loan a/c		405000
	(being loan taken for payment of building)
31-Dec	Revaluation of land a/c	390000
	To Land a/c		370000
	To profit on revaluation a/c		20000
	(being land revalued)

b)

Date of purchase	Name fo the asset	Cost (RM)	useful life	2017(RM)	2018(RM)	2019(RM)
01-07-2017	Motor vechiles	100500	9	5583	11167	11167
01-01-2018	Equipment	142000	5		28400	28400
01-01-2018	Labelling machine-1	65000			6500	5850
01-04-2019	Labelling machine-2	25000				1875
25-06-2019	Building	450000

c)

Date	Particulars	Debit(RM)	Credit(RM)
31 dec	Depreciation a/c	47292
	To labelling machine -1 a/c		5850
	To labelling machine -2 a/c		1875
	To equipment a/c		28400
	To motor vechiles a/c		11167
	(being depreciation charged to all aasets)

d) EXCERPT OF BALANCE SHEET

Particulars	Amount(RM)
Assets
Non current assets
Motor vehicles	72583
equipment	85200
labelling machine-1	52650
labelling machine-2	23125
land	370000
building	450000

e)

Assets should be depreciated so that cost can be spread out over years and its usage. It defines the usage of asset over time. It helps in spreading income or revenue generated from the asset. It shows usage of asset over period of time.