Question

Company Bina Maju Berhad who is the parent company of Dagang Berhad is property developer incurred RM30 million in 2018 to acquire 100 hectares of agricultural land. The conversion costs amounted to RM20 million. Incidental and legal costs was RM 5 million. The land was designated as follows: A total 40 hectares allocated to build 200 link houses, selling price RM600,000 per unit. The plans to develop the link houses were approved September 2020. A rateable portion of the land was reclassified to project costs (a current asset) for the year ended 31 December 2020. 4 hectares of land to construct a clubhouse cum office costing RM10 million and this construction will start January 2021. In 2020, the company spent RM 5 million on connecting roads and RM7 million on infrastructure cost budgeted for future periods.

Required:- Ascertain and allocate the cost land held for development upon conversion to commercial land and development of the basic infrastructure in 2020 to development project account. (10 marks)