SULIT

FACULTY OF ECONOMICS AND BUSINESS

UNIVERSITI MALAYSIA SARAWAK
94300 Kota Samarahan
Sarawak

Mid Examination

Code / Course : EBA 2013 / Financial Accounting & Reporting 2

Matric No. :
Semester/Session : 1 / 2023-2024
Date : 5 Dec 2023 :
Time : 2 pm – 4 pm
Duration : 2 hours
Facilitator : Dr. Salawati Sahari

General Instructions To Students

(To be read together with course specific instructions, if any)

1. This examination paper consists of THREE questions. Students have to answer all questions.

2. Read the questions carefully before answering them. Attempt this paper yourself. Any form of
communication with other students, friends or family members during the examination are strictly
PROHIBITED.

3. This assessment must be clearly hand-written on a clean exam paper provided.

 The answer for each question must start on a new page.
 Write full name, matric number and question number at the top left corner of each page.

Once completed, submit your answers as instructed by your lecturer.

4.
Submission of plagiarized works or works done by another person or any means of cheating,
5. partly or fully, will be considered VOID.

6 Candidates are required to abide by the ETIKA AKADEMIK as stated in clause 11 Peraturan
Akademik Ijazah Sarjana Muda, UNIMAS.

7. This examination paper consists of 4 printed pages (excluding cover)

Unit Peperiksaan
Fakulti Ekonomi dan Perniagaan (FEP)
 EBA2013: FINANCIAL ACCOUNTING & REPORTING 2
SEMESTER 1 SESSION 2023/2024

QUESTION 1

On 1 January 2020, Starbucket Bhd acquired a brand for RM50,000 on credit. The expected economic
useful life is 5 years. The entity adopts the revaluation model & a straight-line amortization method.
On 31 Dec 2021, the fair value of the brand was RM42,000 and on 31 Dec 2022 was RM26,000.

During the year 31 Dec 2023, the brand hits its significant issues on products boycott due to the brand
names which leads to a fair value of RM5,000.

Required:
Show the journal entries (with all workings and explanations on Revaluation Reserve account balance
for related years) from 1 Jan 2020 – 31 Dec 2023.

No journal narration is required.

(Total: 20 marks)

Solutions Q1
a.

Y2020
1 Jan
Dr IA (Brand) 50,000
Cr Ac Payable 50,000 
31 Dec
50,000/5 years = 10,000
Dr Amortization exp (PL) 10,000
Cr Acc amortization (SoFP) 10,000

31 Dec 2021
Dr Amortization exp (PL) 10,000
Cr Acc amortization (SoFP) 10,000

BV= 50k-10k - 10k = 30k

FV= 42k
BV < FV = revaluation surplus

Surplus = 42k-30k = 12k

Dr IA (Brand) 12k
CR Revaluation reserve (RR) 12k
(Being revaluation surplus)

Dr Acc Amortization (10k+10k) 20k

Cr IA 20k
(to contra back acc. amortization expense charge)

31 Dec 2022
Dr Amortization exp (PL) 14k
Cr Acc amortization (SoFP) 14k
42k / 3years = 14k

Dr RR 4k (14k – 10k) 

(Dr. Salawati Sahari) Page

 EBA2013: FINANCIAL ACCOUNTING & REPORTING 2
SEMESTER 1 SESSION 2023/2024

Cr Retained earnings 4k

(to adjust increase in amortization expense)

FV: 26k
BV= 42k – 14k= 28k
BV > FV = 2k (deficit) 

Balance RR account = 12k-4k = 8 k. So enough to be charge deficit:

Dr RR 2k
Cr IA 2k
(revaluation deficit)

Dr Acc Amortization 14k

Cr IA 14k
(to contra back acc. amortization expense charge)

31 Dec 2023
Dr Amortization exp (PL) 13k
Cr Acc amortization (SoFP) 13k
26k / 2years = 13k

Dr Retained earnings (equity) 1k (13k – 14k) 

Cr RR 1k
(to adjust decrease in amortization expense)

BV = 26k-13k= 13k
FV = 5k
BV > FV = 13k-5k = 8k (deficit) 

Balance RR account = 8k – 2k + 1k = 7k. So NOT enough to be charge deficit. Therefore, the

balance RM 1k will be expensed off. 

Dr RR 7k
Dr Expense (PL) 1k
Cr IA 8k
(revaluation deficit)

Dr Acc Amortization 13k

Cr IA 13k
(to contra back acc. amortization expense charge)

40 /2 = 20 marks

QUESTION 2

a. On 1 October 2021, ZUU Coffee Bhd purchased a property by cash comprising a freehold
land at the cost of RM1m and 15-storey building for RM8 m. After acquisition, the building
was renovated at a cost of RM100,000, paid by cash. The renovation was completed on 31

(Dr. Salawati Sahari) Page

 EBA2013: FINANCIAL ACCOUNTING & REPORTING 2
SEMESTER 1 SESSION 2023/2024

Dec 2021 and 14 floors were rented to retailers, while 1 floor were used to operate its cafe.
The estimated useful life of the building is 52 years and depreciation method is straight-line
(ignored pro-rated monthly basis).

On 1 October 2022, the land and building were revalued at RM3m and RM6.1m, respectively.

On 1 October 2023, the tenancy of the building with retailers was terminated and ZUU Coffee
Bhd has leased out all 14 floors to its subsidiaries and the remaining floors are used as the
headquarters. The fair value of the land and building on 1 October 2023 are RM6m and RM
7.5 m, respectively.

ZUU Coffee Bhd accounting year ended 31 December.

Required:

Show journal entries to record the above information from 1 October 2021 until 31 Dec 2023
by showing all related workings but journal narrations are not required.
(15 marks)

b. Under the scope of MFRS140 Investment Property, defines the ancillary services. Explain
how ancillary services could be classified under MFRS 116 PPE or MFRS 140 IP. Show
relevant example.
(5 marks)
(Total: 20 marks)

Solutions Q2

a.
1 October 2021
Dr Investment property (land) RM1m
Dr Investment property (building) RM8m
Cr Cash RM9 m
(To record investment properties)

31 Dec 2021
Dr Investment property (building) RM0.1m
Cr Cash RM0.1m
(To record incurred building renovation cost)

1 October 2022
Dr Investment property (land) RM2m (3m-1m) 
Cr Fair value gain on investment property RM2m
(To record fair value gain for the property)

1 October 2022
Dr Fair value loss on investment property RM 2m (6.1m – 8.1m) 
Cr Investment property (building) RM 2m 
(To record fair value loss for the building)

1 October 2023

(Dr. Salawati Sahari) Page

 EBA2013: FINANCIAL ACCOUNTING & REPORTING 2
SEMESTER 1 SESSION 2023/2024

Dr Investment property (land) RM 3m (6m-3m) 

Dr Investment property (building) RM 1.4m (7.5 m-6.1m) 
Cr Fair value gain on investment property RM 4.4m
(To record fair value gain for the property)

In its group account, the property should be reclassified as owner-occupied property.

1 October 2023
Dr Owner-occupied property (land) RM6m
Dr Owner-occupied property (building) RM7.5m
Cr Investment property (land) RM6m
Cr Investment property (building) RM7.5m
(To transfer from investment property to owner-occupied property)

31 Dec 2023
Dr Depn Exp RM 150k(7.5m/50y) 
Cr Acc Depn RM 150k 
(Depn for PPE building)

24 /1.6 = 15 marks

b.
Define ancillary services 1m
Explain significant ancillary services costs MFRS 116 2m
Explain insignificant ancillary services costs MFRS 140 2m
5 marks

QUESTION 3

Aliff Tiga Sdn Bhd is a company that received contract rearing sport horses where they typically take
stock on as foals and sell the horses as sport horses. They provided the following information regarding
its management of its entity:

Date Details
1.1.2023 8 foals, 1 year old
1.7.2023 Purchase 3 six-month old foals

(Dr. Salawati Sahari) Page

 EBA2013: FINANCIAL ACCOUNTING & REPORTING 2
SEMESTER 1 SESSION 2023/2024

1.10.2023 Purchase 2 foals, nine-month old

31.12.2023 4 foals born

Fair value less costs to sell per animal RM

1.1. 2023 1 year old 3,000
1.7. 2023 6 months old 1,500
1.10.2023 9 months old 1,800
31.12. 2023 New born 1,000
3 years old 4,900
2 years old 3,800
9 months old 2,500
6 months old 2,000
1 year old 3,400

Required:
a. Calculate the carrying amount for the Year 2023 by showing amount transfer to the Statement of
Financial Position for the year. Show all your workings.
(17 marks)

b. Explain to Aliff Tiga Sdn Bhd their biological managements above, based on your
understanding of MFRS 141 Agriculture key terms of agriculture activities, agriculture produce
and agriculture assets. Apply the examples from the said company above.
(3 marks)

(Total 20 marks)

Solutions Q3
Year RM SOFP (RM)
2023 

1.1 b/f Fair value (8 *RM 3k)  24k

1.7 Purchase at Cost (3 *RM 1.5k)  4.5k
1.10 Purchase at Cost (2 *RM 1.8k)  3.6k 32.1 k

31.12 Increase in FV less cost to sell due to

price changes 
1y 8*(RM 3.4k-RM 3k)  3.2k
6mos 3*(RM 2k-RM 1.5k)  1.5k
9mos 2* ( RM 2.5k- RM1.8k)  1.4k 6.1 k

31.12 Increase in FV less cost to sell due to

physical change 
1y-2y 8*(RM3.8k-RM3.4k)  3.2k
6mos-1y 3*(RM3.4k-RM2k)  4.2k
9mos-1y 2* ( RM3.4k- RM2.5k)  1.8k
nb 4*RM1k 4k 13.2 k

31.12 Closing stock c/f

(Dr. Salawati Sahari) Page

 EBA2013: FINANCIAL ACCOUNTING & REPORTING 2
SEMESTER 1 SESSION 2023/2024

2y 8*RM 3.8k  30.4k

1y 3*RM 3.4k  10.2k
1y 2* RM 3.4k 6.8k
nb 4*RM1k 4k
CA y 2023 is 51.4 k
34/ 2 =
17m

b.

Explain each terms 3 pt

Example each terms 3 pt

agriculture activities: feeding the foal
agriculture produce: Sport horses* must NOT be horses’ meat/foals
agriculture assets: foal & horses

6 points = 3 marks

END OF QUESTION PAPER

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