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Medan Idaman Sdn Bhd (MISB) acquired an expensive high-tech equipment at the cost of RM300,000 on 2 January 2016. The equipment has a useful life of 6 years and no residual value. MISB has decided to apply the revaluation model to value its equipment. Soloz Management, an independent valuer has provided their opinion that the fair value of the equipment at the end of 2017 was RM252,000. Note: The equipment is intended to be used by MISB until it is fully depreciated. The equipment shall cease to be used in the operations upon reaching its full depreciation.

Required: a) Prepare necessary journal entries to record the acquisition.

(2 marks)

b) Identify the carrying value of the equipment after it has been revalued. Prepare the relevant adjustment journal entries.

(6 marks)

c) Assume that the equipment is fully utilised until its useful life. Prepare journal entries to record the retirement of the equipment.

(2 marks)

d) Assume in 2020, (taking consideration of 2017s valuation) the residual value of the equipment is RM3,000. MISB managed to sell the equipment as scrap for cash at RM20,000. Explain your answer and provide the journal entries to record this disposal.

(6 marks)

e) Assume (taking consideration of 2017s valuation) that the residual value of the equipment is RM3,000; MISB continues to use until the equipment it is fully depreciated in 2021. (i) Provide your justification and any journal entries to record this.

(2 marks) (ii) Show how the equipment will be disclosed in Statement of Financial Position as at 31 December 2021. Explain your answer.

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