Illustration 1 : Acquisition and disposal of property, plant and equipment On 1 January 2016, Pantas Bhd acquired a vehicle for RM200,000. On 1 July 2018, the company purchased another vehicle costing RM300,000. The vehicles’ estimated useful life are 10 years. On 31 December 2018, Pantas Bhd disposed a machine which was purchased for RM400,000 on 1 January 2016. The proceeds from the sale was RM300,000. The machine’s estimated useful life is 10 years. The company depreciates its asset based on straight line method on monthly basis. Required : Prepare the schedule of movement of Pantas Bhd’s assets for the year ended 31 December 2018.
Solution- illustration 1 Steps 1.
Analyse the information given : acquisition and disposal of property, plant and equipment. Timeline
2 years 1.1.2016
6 months 1.1.2018
1.7.2018
31.12.2018
Acquisition :
Acquisition :
Disposal:
vehicle 1=RM200k
vehicle 2=RM300k
Machine
Machine=RM400k
2.
prepare the template for notes to account on property, plant and equipment vehicle
machine
Balance b/d as at 1 January 2018
200,000
400,000
Acquisitions
300,000
-
-
(400,000)
500,000
0
Cost / Valuation
Disposals Balance c/d as at 31 December 2018
Accumulated depreciation
Balance b/d as at 1 January 2018
40,000
80,000
Charge for the year
35,000
40,000
-
(120,000)
Balance c/d as at 31 December 2018
75,000
0
Carrying amount -31 December 2018
425,000
0
disposals