ASSIGNMENT 2 PPE

(70 Marks)
1. Faridah Sdn. Bhd. closes its account on 31 March every year. The following information
is relating to their non-current assets as at 1 April 2015:

Non-current assets Cost (RM) Date of acquisition

Land 2,556,500 1 April 2011
Building 955,000 1 April 2011
Motor vehicles 396,500 27 September 2013
Machineries 205,500 2 October 2013

The companys policy on depreciation of non-current assets is as follows:

(i) The useful life of building is 50 years and charged the depreciation using straight
line method on yearly basis. Residual value for this building is RM37,000. No
depreciation was charged on the land.

(ii) Depreciation on motor vehicles is to be calculated at 15% per annum on net book
value, with a full year depreciation charged in the year of purchase and none in
the year of disposal.

(iii) Machineries are to be depreciated at 20% per annum on cost using monthly
basis.

During the year ended 31 March 2016, the following transactions took place:

1 April Land was revalued to RM2,990,000 by professional valuer.

28 May One of the motor vehicles cost RM88,000 that acquired on 11 April
2014 was involved in a major accident and had to be written off. The
business received cheque from the Takafeel insurance company as a
compensation. The gain on disposal was amounting to RM6,800.

30 August In order to replace one of the motor vehicles that met an accident last
few months, the company decided to bought a new motor vehicles
costing RM99,580. The company paid 35% from the purchase price by
cheque and the balance is remains outstanding.

31 Dec The machinery costing RM22,000 that purchased on 2 October 2013,

was traded-in with a higher technological machine named JGD131 to
meet its production demands. The costs incurred for the new acquisition
are as follow:
RM
Purchase price 35,500
Initial delivery and handling cost 6,500
Installation and assembly cost 4,800
Administrative cost 1,500

It is agreed that the trade-in value was RM17,500 and the balance
remain unpaid.
 Required to prepare the following for the year ended 31 March 2016:

(a) Land, building, motor vehicles and machineries account. Show all workings.
(5 marks)

(b) Accumulated depreciation accounts for each of the non-current assets. Show
all workings.
(10 marks)

(c) Revaluation reserve and disposal account.

(4 marks)

(d) Statement of Comprehensive Income (extract).

(3 marks)

(e) Statement of Financial Position (extract).

(3 marks)

(f) List any FOUR (4) costs that shall be incurred to bring an asset into present
location and condition during acquisition of an asset.
(2 marks)

(TOTAL = 27 Marks)

2. Colourful Tale Sdn Bhd prepares its year end accounts on 30 June annually. The
following information was extracted from the books of Ring Ring Sdn Bhd for the year
ended 30 June 2015.
RM
Land 358,000
Machinery 287,000
Motor vehicle 241,500
Office equipment 94,500
Accumulated depreciation of machinery 98,500
Accumulated depreciation of motor vehicle 77,500
Accumulated depreciation of office equipment 44,500
Revaluation reserve 80,600

Below are the parts of additional information related to the non-current assets.

Date of purchase Non-current assets Cost (RM)

27 August 2008 Machinery (NH) 58,000
11 September 2010 Machinery (NA) 62,000
2 October 2010 Motor vehicle (NAW1104) 45,000
10 February 2011 Office equipment 30,400

The companys policy on depreciation of non-current assets is as follows:

Land no depreciation provided.

Machinery 15% on cost based on monthly basis.
Motor vehicles 10% on cost based on yearly basis. It is the policy to charge
a full year's depreciation in the year of purchase and none
in the year of disposal.
Office equipment 5% on net book value based on monthly basis.
The following transactions occurred during the year ended 30 June 2016.

(i) On 3 July 2015, the land was revalued by professional valuers to RM378,000.

(ii) On 21 October 2015, Machinery NH was traded in for new machinery called HA.
The purchase price of the new machinery was RM43,000. The trade-in value was
RM21,700 and the remaining balance was paid by cheque..

(iii) Machinery NA was sold on 1 December 2015 amounted to RM20,000.

(iv) On 21 February 2016, NAW 1104 was involved in a major accident and had to be
written off. The insurance company agreed to pay RM25,000.

(vi) The company purchase a new motor vehicle (NHB1101) from Tan Chong Sdn
Bhd at a purchase price of RM56,000 on 1 April 2016. The company paid 15%
cash as initial payment to Tan Chong Sdn Bhd. and the balance remain
outstanding.

(v) As at 10 May 2016, an office equipment costing RM30,400 was traded in for a
new equipment costing RM23,300 with trade in value of RM8,000. The balance
remain outstanding.

Required to prepare the following for the year ended 30 June 2016:

(a) Land, machinery, motor vehicle and office equipment account. Show your
workings.
(8 marks)

(b) Accumulated depreciation accounts for each of the non-current assets. Show
your workings.
(15 marks)

(c) Revaluation reserve account.

(3 marks)

(d) Disposal account for each of non-current asset. Show your workings.
(5 marks)

(e) Statement of Comprehensive Income (Extract)

(4 marks)

(f) Statement of Financial Position (extract).

(3 marks)

(e) Explain capital and revenue expenditure.

(5 marks)

(TOTAL = 43 Marks)