a) An item of plant and equipment was purchased on 1 April 20X1 for R100,000. At the date of acquisition its expected useful economic life was ten years. Depreciation was provided on a straight line basis, with no residual value.
On 1 April 20X3, the asset was revalued to R95,000. On 1 April 20X4, the useful life of the asset was reviewed and the remaining useful economic life was reduced to five years, a total useful life of eight years.
Calculate the carrying amount at 31 March 20X5, as required by IAS 16 Property, Plant and Equipment. (4 marks)

b) Neville has only two items of inventory on hand at its reporting date.
Item 1 – Materials costing R24,000 bought for processing and assembly for a customer under a ‘one off’ order which is expected to produce a high profit margin. Since buying this material, the cost price has fallen to R20,000.
Item 2 – A machine constructed for another customer for a contracted price of R36,000.
This has recently been completed at a cost of R33,600. It has now been discovered that, in order to meet certain health and safety regulations, modifications at an extra cost of R8,400 will be required. The customer has agreed to meet half the extra cost.
Calculate the total value of these two items of inventory in the statement of financial position. (4 marks)

c)
At 30 September 20X5, BY had the following balances, with comparatives:
Statement of financial position extracts
As at 30 September 20X5 20X4
R000 R000
Non-current tangible assets
Property, plant and equipment 260 180
Equity and reserves
Property, plant and equipment revaluation reserve 30 10
The statement of profit or loss for the year ended 30 September 20X5 included:
Gain on disposal of an item of equipment R10,000
Depreciation charge for the year R40,000
Notes to the accounts:
Equipment disposed of had cost R90,000. The proceeds received on disposal were R15,000.
Calculate the property, plant and equipment purchases that BY would show in its
statement of cash flow for the year ended 30 September 20X5, as required by IAS 7

Statement of Cash Flows. (4 marks)

d)
DOC purchased property for R320,000 exactly 10 years ago. The land included in the price
was valued at R120,000. The property was estimated to have a useful economic life of 20
years.
DOC has now had the property revalued (for the first time) by a professional valuer. The
total value had increased to R800,000, the land now being valued at R200,000. The useful
economic life remained unchanged. Calculate the amount that should be credited to DOC’s revaluation reserve. (4 marks)

e)
JT is registered with its local tax authority and can reclaim value added tax paid on items
purchased.
During the year JT purchased a large machine from another country. The supplier invoiced
JT as follows:
Cost of basic machine 100,000
Special modifications made to basic design 15,000
Supplier’s engineer’s time installing and initial testing of machine 2,000
Three years’ maintenance and servicing 21,000
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138,000
Value added tax @ 20% 27,600
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Total 165,600
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Prior to delivery, JT spent R12,000 preparing a heavy duty concrete base for the machine.
Calculate the amount that JT should debit to non-current assets for the cost of the machine. (4 marks)