Latihan PAK Pertemuan 5 SOAL 1 Merando Company acquired equipment on January 1, 2009, for 60,000.

Merando elects to value this class of equipment using revaluation accounting. This equipment is being depreciated on a straight-line basis over its 6-year useful life. There is no residual value at the end of the 6-year period. The appraised value of the equipment approximates the carrying amount at December 31, 2009 and 2011. On December 31, 2010, the fair value of the equipment is determined to be 35,000. Instructions (a) Prepare the journal entries for 2009 related to the equipment. (b) Prepare the journal entries for 2010 related to the equipment. (c) Determine the amount of depreciation expense that Merando will record on the equipment in 2011. SOAL 2 On 1 January 2009, Harbour Limited (Harbour) borrowed $180 million to finance the construction of a property, which was expected to take 2 years to build. Construction work of this qualifying asset was commenced on 1 January 2009. Harbour drew down the loan facilities in 3 parts in the amounts of $40 million, $80 million and $60 million on 1 January 2009, 1 May 2009 and 1 September 2009 respectively. Funds used for expenditures on the construction of the property were as follows: $m 1 January 2009 40 1 May 2009 80 1 September 2009 60 Interest of the loan was fixed at 6 % per annum. The unutilized funds were temporarily invested with a return of 3 % per annum. Required: a. Determine the borrowing costs eligible for capitalisation for the year ended 31 December 2009 and consequently the cost of the property as at 31 December 2009. Prepare the journal entry to account for the borrowing costs capitalised in 2009. b. Will your answer in part a) be different if Harbour drew down the loan facilities of $180 million on 1 January 2009 instead of in 3 parts during 2009? Particularly, what will be the borrowing costs eligible for capitalisation for the year ended 31 December 2009 and consequently the cost of the property as at 31 December 2009? Prepare the journal entry to account for the borrowing costs capitalised in 2009.

Jawaban Latihan Soal 1 (a) January 1, 2009 Equipment........................................................................ Cash...........................................................................

60,000 60,000

December 31, 2009 Depreciation Expense....................................................... 10,000 Accumulated DepreciationEquipment..................... (b) December 31, 2010 Depreciation Expense........................................................ Accumulated DepreciationEquipment......................

10,000

10,000 10,000

Accumulated DepreciationEquipment............................. 20,000 Loss on Impairment............................................................. 5,000 Equipment (60,000 35,000).................................... (c) Depreciation expense2011: (60,000 25,000) 4 = 8,750 Soal 2 Part a $m Borrowing costs: 1 Jan to 30 April 2009 ($40m x 6% x 4/12) 0.8 1 May to 31 August 2009 ($120m x 6% x 4/12) 2.4 1 September to 31 December 2009 ($180 x 6% x 4/12) 3.6 6.8 Cost of assets: Expenditure incurred 180.0 Borrowing costs capitalised 6.8 Carrying amount as at 31 December 2009 206.8 Journal entry to account for the borrowing costs capitalised in 2009: $m $m Dr. Property under construction 6.8 Cr. Interest expenses 6.8

25,000

Part b
Yes, the borrowing costs eligible for capitalisation for the year ended 31 December 2009 will be $14 million and the cost of the property as at 31 December 2009 will be $214 million, as calculated below:

$m Borrowing costs: 1 Jan to 31 December 2009 ($180m x 6%) Less: investment income 1 Jan to 31 March 2009 ($140m x 3% x 3/12) 1 May to 31 August 2009 ($60m x 3% x 3/12) Cost of assets: Expenditure incurred Borrowing costs capitalised Carrying amount as at 31 December 2009 10.80 (1.05) (0.45) 9.30 180.0 9.3 189.3

Journal entry to account for the borrowing costs capitalised in 2009: $m $m Dr. Property under construction 9.3 Cr. Interest expenses 9.3