FRK 111 An introduction to Accounting Revised Edition

Question 8.15 QU This REQUIRED RE a. Prepare the general journal entry of Koenic Manufacturers for the depreciation that must be provided on 28 February 20.6. b. Show the disclosure of the non-current assets in the statement of financial position and notes to the financial statements of Koenic Manufacturers for the year ended 28 February 20.6. INFORMATION On 1 March 20.5, the following information was available from the records of Koenic Manufacturers in respect of their non-current assets: Furniture and Machinery equipment Vehicles Purchase date 1 September 20.3 1 May 20.4 1 March 20.3 Cost R160 000 R660 000 Accumulated R360 000 depreciation R78 750 R129 600 (28 February 20.5) Method of depreciation Straight-line method Production unit Diminishing balance at 25% per annum method method at 20% per annum Residual value Nil R30 000 Nil Useful life 4 years 5 years Estimated number 120 000 units to be produced during useful life Additional information 1 . On 30 November 20.5, a new vehicle was purchased on credit from Cars 4 U at R120 000. An air conditioner costing R5 000 was installed in the vehicle and paid for on the same day. These transactions have not been recorded. 2. On 28 February 20.6, the end of the financial year, the machinery had produced 18 000 units for the year