NUR HUSNINA BINTI AZMI

2021427278
NACAB3B

ANSWER:

QUIZ 1
1. A 6. B

2. C 7. A

3. C 8. C

4. A 9. D

5. B 10. B

QUIZ 2

1. A 6. B

2. D 7. B

3. A 8. B

4. B 9. C

5. D 10. A
TEST

QUESTION 1

Part A

Explain briefly if contract A and B entered by Star Bhd contain lease based on MFRS 16
Leases.

According to MFRS 16, Contract A, the contract between Star Bhd and Quest Bhd contain a
lease agreement. This is because Star Bhd has right to use the cars for 3 years. The right being
transferred to Star Bhd in form of benefits received by Star Bhd for the period of lease including
when the cars are not being used by the company. Star Bhd also has right to determine the
particular cars to be used for transporting customers over the period. Besides that, Quest Bhd
being required to replace the car if needed by Star Bhd show thar Quest Bhd did not uses also
show that Quest Bhd did not have any right towards the car during the lease period.

Meanwhile, Contract B, the contract between Star Bhd and Galaxy Bhd did not contain a lease
agreement. This is because, Star Bhd did not has any right to use the lorries over the
agreement period. The benefit lied on Galaxy Bhd and Galaxy Bhd has the power or right to
decided what types of goods and quantity to be transported by the lorries. Galaxy Bhd also has
right or power to use the lorries if nit being used by Star Bhd. The agreement shall be treated as
rental agreement not a lease agreement.
Part B

i. Journal Entry for the year 2019

Working:

RM1,500,000 × 0.926 = RM 1,389,000

RM1,500,000 × 0.857 = RM 1,285,500

RM1,500,000 × 0.794 = RM 1,191,000

RM1,500,000 × 0.735 = RM 1,102,500

RM1,500,000 × 0.681 = RM 1,021,500

RM 5,989,500

(+) Installation Cost RM 25,000

TOTAL RM 6,014,500

Dr. Right of Use (ROU) RM 6,014,500

Cr. Bank RM 25,000

Cr. Lease Liability RM 5,989,500

Dr. Depreciation -ROU RM 1,202,900

Cr. Accumulated Depreciation - ROU RM 1,202,900

Dr. Lease Liability RM 1,500,000

Cr. Bank RM 1,500,000

 Dr. Lease Interest/SOPL RM 4,995,660

Cr. Lease Liability RM 4,995,660

ii. Extract SOPL and SOFP for the year 2020

UBB Berhad
Statement Profit or Loss (Extract) for the year 2020

Expenses

Depreciation – ROU RM 1,202,900

Lease interest RM 4,995,660

UBB Berhad
Statement of Financial Position (Extract) for the year 2020

Non – Current Asset

Right of Use (6,014,500 – 1,202,900) RM 4,811,600

Lease interest RM 4,995,660

Non - Current Liability

Lease liability () RM

Current Liability

Lease liability RM
QUESTION 2
i. Carrying amount as at 31/12/2019

𝑅𝑀500,000
Machine 1 RM 500,000 – [ 5
× 1]

RM 400,000

𝑅𝑀50,000
Machine 2 RM 500,000 - [ 5
× 1]

RM 490,000

Goodwill RM 45,000

RM 400,000 + RM 490,000 + RM 45,000

= RM 935,000

Value in use RM 370,650

Fair value RM 285,000

Carrying amount RM 935,000

Impairment Loss

RM 935,000 – RM 285,000

= RM 605,000
 𝑅𝑀 400,000
Machine 1 × RM 605,000
𝑅𝑀 890,000

RM 271,910

𝑅𝑀 490,000
Machine 2 × RM 605,000
𝑅𝑀 890,000

RM 333,090

Carrying amount as at 1/1/2020

Machine 1 RM 400,000 – RM 271,910

RM 128,090

Machine 2 RM 490,000 – RM 271,910

RM 156,910

Goodwill NIL

ii. Reversal as at 31/12/2020

Carrying amount with Impairment Loss

𝑅𝑀 128,090
Machine 1 RM 128,090 - 3

RM 85,393
𝑅𝑀 156,910
Machine 2 RM 156,910 - 3

RM 103,607

CA RM 189,000 : RA RM 21,000
No impairment loss but need to reserve.
 Carrying amount without impairment loss (excluding goodwill)

Maximum amount to reserved:

Lower amount between Revenue Asset with Impairment Loss and Carrying Amount
without Impairment Loss – Carrying Amount with Impairment Loss
RM 210,000 – RM 189,000
RM21,000

iii. The Impairment Loss of non – revalued asset is recognized immediately in profit or loss
as expenses items.
The Impairment Loss on revalued asset is written off against the asset revaluation
reserved or surplus. Any balance after written off will be transfer to profit or loss as
expenses items.