Question
Botho Ltd prepares its financial statements to 31 December each year. At 1 January 2017 the following balances existed in the records of Botho Ltd.
Botho Ltd prepares its financial statements to 31 December each year. At 1 January 2017 the following balances existed in the records of Botho Ltd.
P'000
Land cost 1,000
Buildings cost 500
Buildings: accumulated depreciation 210
Plant and equipment cost 40
Plant and equipment accumulated depreciation 24
The company's depreciation policies are as follows.
- Land no depreciation.
- Buildings depreciation provided at 2% per annum on cost on the straight-line basis.
- Plant and equipment depreciation provided at 25% per annum on the reducing balance basis.
- A full year's deprecation is charged in the year of acquisition of all assets and none in the year of disposal.
During the year to 31 December 2017 the following transactions took place.
1 March Office equipment which had cost P8,000 and with a carrying amount of P2,000 was sold for P3,000.
10 June Office equipment purchased for P16,000. This equipment was to replace some old items which were given in part exchange. Their agreed part exchange value was P4,000. They had originally cost P8,000 and their carrying amount was P2,000. The company paid the balance of P12,000 in cash.
8 October An extension was made to the building at a cost of P50,000.
In preparing the financial statements at 31 December 2017 it was decided to revalue land upwards by P200,000 to reflect a recent survey.
Required: Prepare a Property, Plant and Equipment note for Botho Ltd as it will appear in the explanatory notes to their financial statements.
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