Horizontal Ltd has the following properties at 1 January 2019 which it has to account for in its financial statements. Due to the Corvid 19 pandemic the Accountant of Horizontal Ltd Mr Expert was indisposed for the 3 months leading to the end of the financial period. Mr Expert requested you (the junior Accountant of Horizontal Ltd) to prepare the financial statements of Horizontal Ltd group. As you began the preparation you encounter the following transactions: Property A An office building used by Horizontal for administration purposes has a depreciated historical cost of N52million. At 1 April 2019 it had a remaining useful life of 20 years. After reorganization on 1 October 2019 the property was letto a 3rd part and reclassified as an investment property applying Horizontal Ltd.'s policy of the fair value model. An independent property evaluator assessed the property to have a fair value of NS2.3 million at 31 March 2020. Property B This is an office building sub-let to a subsidiary of Horizontal Ltd. At 1 April 2019, it had a fair value of N$1.5 million which had risen to NS1.65million at 31 March 2019. Property C During the current period, Horizontal Ltd spent the following amounts on its block of flats, an investment property: N$500 000 to build an extra floor to be rented out as a penthouse flat under an operating lease NS10 000 to replace all globes in the building that had blown in the last month; The building's lift was damaged due to vandalism and Horizontal Ltd had to pay N$25 000 to replace it, the fair value of the damaged lift wus N$10 000. Required: 3.1 in your financial statements explain how joint use property occur and how they 5 are classified? 3.2 As part of the build up to the financial statements, Journalise the above 10 transactions 33 Prepare extracts of Horizontal's Statement of profit or loss and other comprehensive income and Statement of financial position for the year 31 March 8 2020 in respect of the above properties. 3.4 State how property B will be classified and treated in the consolidated Statement of Financial position of Horizontal Group Total 25 5 Horizontal Ltd has the following properties at 1 January 2019 which it has to account for in its financial statements. Due to the Corvid 19 pandemic the Accountant of Horizontal Ltd Mr Expert was indisposed for the 3 months leading to the end of the financial period. Mr Expert requested you (the junior Accountant of Horizontal Ltd) to prepare the financial statements of Horizontal Ltd group. As you began the preparation you encounter the following transactions: Property A An office building used by Horizontal for administration purposes has a depreciated historical cost of N52million. At 1 April 2019 it had a remaining useful life of 20 years. After reorganization on 1 October 2019 the property was letto a 3rd part and reclassified as an investment property applying Horizontal Ltd.'s policy of the fair value model. An independent property evaluator assessed the property to have a fair value of NS2.3 million at 31 March 2020. Property B This is an office building sub-let to a subsidiary of Horizontal Ltd. At 1 April 2019, it had a fair value of N$1.5 million which had risen to NS1.65million at 31 March 2019. Property C During the current period, Horizontal Ltd spent the following amounts on its block of flats, an investment property: N$500 000 to build an extra floor to be rented out as a penthouse flat under an operating lease NS10 000 to replace all globes in the building that had blown in the last month; The building's lift was damaged due to vandalism and Horizontal Ltd had to pay N$25 000 to replace it, the fair value of the damaged lift wus N$10 000. Required: 3.1 in your financial statements explain how joint use property occur and how they 5 are classified? 3.2 As part of the build up to the financial statements, Journalise the above 10 transactions 33 Prepare extracts of Horizontal's Statement of profit or loss and other comprehensive income and Statement of financial position for the year 31 March 8 2020 in respect of the above properties. 3.4 State how property B will be classified and treated in the consolidated Statement of Financial position of Horizontal Group Total 25 5