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Homework answers / question archive / Villa Bhd acquired a sport equipment for RM500,000 on 1 January 2013 and recognized under MFRS116
Villa Bhd acquired a sport equipment for RM500,000 on 1 January 2013 and recognized under MFRS116. The life span of the asset is expected to be 10 years. The fair value of the asset on 1 January 2015 was determined at RM380,000. Required: a) Prepare the journal entries on the revaluation of the asset on 1 January 2015. (3 marks) ACIASSIGNMENT 1/FAR320 b) The asset was disposed for RM450,000 on 31 December 2015. Determine the amount of gain or loss from disposal of the asset as at that date.
Calculation of carrying amount of sport equipment on 1 January 2015
Depreciation for two years (RM500000*2/10) = 100000
carrying amount of sport equipment on 1 January 2015 = (500000 – 100000)
= RM400000
Calculation of revaluation gain or loss on 1 jan 2015
carrying amount = RM 400000
Fair value = RM 380000
Deficit ( 400000 – 380000) = 20000
Carrying amount of sport equipment on 31 dec 2015
(400000 – 20000 - (380000/8)) ( carring amount - deficit - depreciation )
= 332500
a. Journal entry
Dr SOPL RM20,000
Cr sport equipment RM20,000
b. Calculation of amount of gain or loss on disposal of asset
dispose amount - Carrying amount of asset
450000 – 332500
Gain on disposal of asset = 117500
