Munirah Bhd was incorporated in 2015. In order to expand its business operation, MunirahBhd made the following transactions related to property, plart andequipment in the year 2021:1. To construct a new factory, Munirah Bhd purchased a piece of land with a building forRM700,000(land RM5 50,000 and buildingRM150,000). Munirah Bhd paid a real estatebroker's commission of RM28,000, legal fees for title investigation of the land ofRM5,000 and property tax for the land of RMI0,000. Shortly after purchasing the land,Munirah Bhd demolished the old building and incurred a total cost of RM20,000.Munirah Bhd received RM4,800 from the selling of the scrap from the old building Anadditional cost of RM3,000 was paid to grade the land. After grading the land, MunirahBhd installed fences around the property at the cost of RM17,000. Then, to construct anew factory, Munirah Bhd paid RMS,200 of the architect's fees, and the payment to thebuilding contractor was RM200,000. The insurance policy paid by Munirah Bhd wasRM10,000, including RM3,500 of insurance after the construction is completed.Munirah Bhd paid an additional RM25,000 for preparing the parking lots and driveways.Munirah Bhd purchased a machine for production in the factory at the total invoice costof RM120,000 with the tem, 2/10, n/60. Munirah Bhd paid within the discount period.The transportation cost incurred was RMS,500, and insurance paid during the transit wasRMI,200. Since this machine needs a special foundation, Munirah Bhd built a specialplatform to place this machine at the cost of RM10,000. After installation, a test run wasconducted at the cost of RM1,000. After the machine was ready to be used, MunirahBhd paid RM8,000 to train the employees and RM6,000 paid for maintenancecosts.2.3.Munirah Bhd exchanged its old equipment with a new equipment to Agma Bhd. Theoriginal cost for old equipment was RM100,000, and the accumulated depreciation wasRM40,000. The fair value of the old equipment was RM120,000. In addition to the oldequipment, Munirah Bhd paid RM30,000 cash to Agma Bhd. The exchange of theequipment has commercial substance.4.Munirah Bhd started a research and development process to produce a new productmodel in early 2021 and completed it before the end of the year. The research costincurred was RM150,000, and the development cost fortesting and applying fora licensefor the new model after achieving the economic viabilky point was RM250,000.REQUIRED:(a) Calculate the costs for land, building, land improvement, machine and equipment forMunirah Bhd for the year 2021 based on MFRS 116 Property, Plant and Equipment.(b) Prepare the journal entry to record the transaction related to the exchange of equipmeby Munirah Bhd.(c) Discussthe accounting treatment for researchanddevelopmentcostincurred by MunirahBhd based on MFRS 138 Intangible Asset.

Intangible Assets - An identifiable non-financial item without a physical foundation is an…

Munirah Bhd was incorporated in 2015. In order to expand its business operation, M Bhd made the following transactions related to property, plant and equipment in the yea 1. To construct a new factory, Munirah Bhd purchased a piece of land with a build RM700,000 (land RM550,000 and building RM150,000). Munirah Bhd paid a rea broker's commission of RM28,000, legal fees for title investigation of the I RM5,000 and property tax for the land of RM10,000. Shortly after purchasing th Munirah Bhd demolished the old building and incurred a total cost of RM2 Munirah Bhd received RM4,800 from the selling of the scrap from the old buildi additional cost of RM3,000 was paid to grade the land. After grading the land, M Bhd installed fences around the property at the cost of RM17,000. Then, to con new factory, Munirah Bhd paid RM5,200 of the architect's fees, and the paymen building contractor was RM200,000. The insurance policy paid by Munirah Bl RM10,000, including RM3,500 of insurance after the construction is com Munirah Bhd paid an additional RM25,000 for preparing the parking lots and driv 2. Munirah Bhd purchased a machine for production in the factory at the total invoi of RM120,000 with the term, 2/10, n/60. Munirah Bhd paid within the discount 200

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 55P