Peter purchased a tractor for R350 000 on 1 September 2019. He estimated the residual value at R120 000 and depreciate it at 15% per year using the diminishing balance method. Peter purchased equipment for R240 000 on 1 June 2020. He decided to sell it for R135 000 on 31 December 2021 and replace it with new equipment of R285 000 on the same day. Peter depreciates his equipment over a period of four years. All his equipment was bought in cash. 

Required:

1 Calculate the book value of the tractor as at 31 March 2022, showing all calculations. (5)

2 What will the book value of the tractor amount to at 31 March 2022 if Peter adopted the straight-line depreciation method? (5)

3 Record all the entries relating to the equipment in the general journals of Peter’s financial records until 31 March 2022. (20)

4 Present the property, plant, and equipment on the Statement of Financial Position for the year ended 31 March 2022 if Peter applied the straight-line depreciation method on the tractor and the equipment.