Answered step by step
Verified Expert Solution
Question
1 Approved Answer
CACNO12 RECOGNITION, MESUREAENT AND DISCLOSURE OF ASSETS Question PPE 10.4 On 1 October 2020 property, plant, and equipment of Kobia Limited consisted of the fallnwinn
CACNO12 RECOGNITION, MESUREAENT AND DISCLOSURE OF ASSETS Question PPE 10.4 On 1 October 2020 property, plant, and equipment of Kobia Limited consisted of the fallnwinn halances: The straight-line rates of depreciation, based on cost, used to date were 10% per annum for plant and equipment; 20% per annum for motor vehicles; and 12.5% per annum for furniture and fittings. It is the company's policy to make full year's depreciation charge on new capital items of fixed assets in the year of purchase. No depreciation is raised on capital items sold during the year. The following additional information is relevant to the calculation of depreciation for the year ended 30 September 2021. a) Walter \& Associates, a firm of appraisers and valuers, professionally valued Land, and buildings during the year at R975 000. When land and building were acquired, R350 000 was attributable to the buildings. b) An item of equipment bought in November 2016 for R105 000 is now recognised to have a total useful life of 20 years. c) A motor vehicle purchased in lune 2018 for R85 000 was traded in at a value of R44 000 in part exchange for a new motor vehicle costing R140000. d) Included with the furniture and fittings is an item which originally cost R15000, and which is already fully depreciated and is to be discarded. You are required to: Prepare a reconciliation schedule for property, plant, and equipment in a form suitable for inclusion in the company's financial statements for the financial reporting period ended 30 September 2021 . Clearly show the amount to be charged against the year's profits and the balances to be shown on the statement of financial position. You may include the relevant accountina policv note as vart of vour answer. lanore taxation. Question PPE10.5A. Ray Construction's trial balance on 31 December 2021, is presented as follows. All 2021 Unrecorded transactions: (i) On 1 May 2021, Ray purchased equipment for R14,950 (all paid in cash and VAT inclusive at a VAT rate of 15% ). (ii) On 1 July 2021, Ray sold for R4,025 (VAT inclusive) equipment which originally cost R5,000. Accumulated depreciation on this equipment at 1 January 2021, was R1,800. (iii) On31 December 2021, Ray sold on account R10 810 (VAT Inclusive) of inventory that cost R6,600. (iv) Ray estimates that allowance for estimated credit losses at year-end to be R4,600. (v) The note receivable is a one-year, 8% note dated 1 April 2021 . No interest has been recorded. (vi) The balance in prepaid insurance represents payment of a R4,400 6-month premium on 1 October 2021. (vii) The building is being depreciated using the straight-line method over 40 years. The residual value is R20,000. (viii) The equipment owned prior to this year is being depreciated -using the straight-line method over 5 years. The residual value is 10% of cost. (ix) The equipment purchased on 1 May 2021 , is being depreciated using the | straight-line method over 5 years, with a residual value of R1,000. (x) The patent was acquired on 1 January 2021 and has a useful life of 10 years from that date. (xi) Unpaid salaries and wages at 31 December 2021, total R2,200. (xii) The unearned rent revenue of R6,900 (VAT inclusive) was received on 1 December 2021 , for 4 months' rent. (xiii) Both the short-term and long-term notes payable are dated 1 January 2021, and carry a 9% interest rate. All interest is payable in the next 12 months. (xiv) Corporate Income tax expense is to be estimated at 28 per cent of the before tax profits. No provisional tax has been made during the year ended on 31 December 2021 Instructions a. Prepare joumal entries for the unrecorded transactions listed above. b. Prepare a 31 December 2021 , adjusted trial balance. c. Prepare a 2021 Statement of profit or loss and a 2021 statement of changes in equity. d. Prepare a 31 December 2021 classified statement of financial position
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started