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Calculate the carrying amount of the plant

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Reference no: EM133147814

Question - On 1 April 2021, Masai Berhad borrowed RM10 million for a term of one year, exclusively to finance the construction of a new piece of plant.

The interest rate on the loan is 5% and is payable on maturity of the loan.

The construction commenced on 1 May 2021. On 1 June 2021, a fatal accident occurred which causes the operation to be suspended until 1 December 2021.

The asset was available for use on 1 March 2022 and total construction cost incurred is RM10 million.

Required - In accordance with the relevant accounting standards,

(i) Calculate the carrying amount of the plant that should appear in Masai Berhad's statement of financial position as at 31 March 2022.

(ii) Calculate the interest that are required to be charged out to statement of profit or loss for the year ended 31 March 2022.

Reference no: EM133147814

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