TUTORIAL 1 TOPIC 1 ANSWER

A.
i. Carrying amount is the amount at which an asset is recognised after deducting any accumulated
depreciation and accumulated impairment losses.
ii. Depreciable amount is the cost or other substitute amount less the estimated residual value.
iii. Useful life is the period over which an asset is expected to be available for use by an entity.

B. Initial cost of machinery on 1 April 2019:

RM
Purchase price:
1st payment 3,500,000
2nd payment 2,850,000
Import duties 350,000
Delivery and installation cost 77,000
Site preparation 165,000
Testing of machinery 6,000
Dismantling cost 21,100
Consultancy fees for the acquisition of machiney 10,000
Sample (2,000)
6,977,100