Here is an extract from the trial balance of Pro-shade Enterprises as at 1 March 20x0:

Additional information:
1. Depreciation on vehicles is calculated on 20% per annum on the straight-line basis.

2. Residual value is based on 25% on the cost of vehicles bought.

3. Depreciation on machinery is calculated at 20% per annum on the diminishing-balance method.

4. No depreciation has been calculated in the current year.

New assets bought:

A New vehicle: 31 May 20x0

– A new car was bought from Dart Motors for an amount of R153 000.

– 85% of the purchase price of the car was financed through Nedfin Bank.

– The other 15% was settled in cash.

– The car was available for use on the same day.

B New vehicle: 30 June 20x0

– Purchased a new machine from Machine Manufacturers (Pty) Ltd on credit.

– The machine cost R293 000. The machine was delivered to Machine Modification on the same day.

– A stabiliser was fitted to the machine to ensure that the machine would be suitable for use in the factory. The cost of the stabiliser was R63 000 that was settled in cash.

– The business also paid R12 000 for the labour cost of the conversion.

– The machine was available for use on the same day.

You are required to

1. Record the transactions in the general journal as at 28 February 20x1.

2. Show how the above transactions should be shown in the statement of financial position and the statement of profit or loss & other comprehensive income as at 28 February 20x1.

Only the non-current assets are required in the statement of financial position.

Transcribed Image Text:

Vehicles Machinery Accumulated depreciation: Vehicles Accumulated depreciation: Machinery 442 000 00 783 000 00 185 000 00 456 000 00