In 2019 SME A incurred (and paid) the following expenditures in acquiring property consisting of ten identical freehold detached houses each with separate legal title including the land on which it is built: Date Amount (N$) Additional Information 1 January 2019 200,000,000 20 per cent of the price is attributable to land 1 January 2019 20,000,000 Non-refundable transfer taxes (not included in the N$200,000,000 purchase price) 1 January 2019 1,000,000 Legal costs directly attributable to acquisition 1 January 2019 10,000 Reimbursing the previous owner for prepaying the non- refundable local government property taxes for the six- month period ending 30 June 2019 1 January 2019 500,000 Advertising campaign to attract tenants 2 January 2019 200,000 Opening function to celebrate new rental business that attracted extensive coverage by the local press 30 June 2019 20,000 Non-refundable annual local government property taxes for the year ending 30 June 2020 Throughout 2019 120.000 Day-to-day repairs and maintenance, including the salary and other costs of the administration and maintenance staff These costs are attributable equally to each of the ten units. SME A uses one of the ten units to accommodate its administration and maintenance staff. The other nine units are rented to independent third parties under non- cancellable operating leases. Before occupying the premises tenants pay SME A a refundable deposit equal to two months' rentals. Deposits held by SME A at 31 December 2019 totalled N$270,000. Rentals received in the year ended 31 December 2019 totalled N$1,550,000, of which N$50,000 relates to January 2020. At 31 December 2019 SME A made the following assessments about the units: Useful life of the buildings: 50 years from the date of acquisition The entity will consume the buildings' future economic benefits evenly over 50 years from the date of acquisition. Assume that the fair value of the units can be determined reliably without undue cost or effort on an ongoing basis and that the residual value of the owner-occupied unit is nil. At 31 December 2019 the fair value of each unit was reliably estimated as N$25,000,000. Required 1. How much is to be credited to bank in january 2019 by SME with respect to invetsment property? 2. What is the amount to be recognise with respect to the non-refundable transfer taxes incurred in acquiring the property by SME A 3.The depeciation to be recognised by SME A on the owner-occupied building in 2019 will amount to? 4.The proportion of the SME A building that is owner- occupied amount to? 5. The proportion of the SME A building that is owner- occupied amount to? 6.The initial property cost of SME A is? 7.What is the cost of SME A's land? 8. The fair value of the SME A investment property at year end amount to? 9. The fair value gain from SME A investment property is 10.SME A rental income for the year amounted to? 11.SME A's rental income liability amount to? 12. The carrying amount of the SME A's property at the year-end amount to? In 2019 SME A incurred (and paid) the following expenditures in acquiring property consisting of ten identical freehold detached houses each with separate legal title including the land on which it is built: Date Amount (N$) Additional Information 1 January 2019 200,000,000 20 per cent of the price is attributable to land 1 January 2019 20,000,000 Non-refundable transfer taxes (not included in the N$200,000,000 purchase price) 1 January 2019 1,000,000 Legal costs directly attributable to acquisition 1 January 2019 10,000 Reimbursing the previous owner for prepaying the non- refundable local government property taxes for the six- month period ending 30 June 2019 1 January 2019 500,000 Advertising campaign to attract tenants 2 January 2019 200,000 Opening function to celebrate new rental business that attracted extensive coverage by the local press 30 June 2019 20,000 Non-refundable annual local government property taxes for the year ending 30 June 2020 Throughout 2019 120.000 Day-to-day repairs and maintenance, including the salary and other costs of the administration and maintenance staff These costs are attributable equally to each of the ten units. SME A uses one of the ten units to accommodate its administration and maintenance staff. The other nine units are rented to independent third parties under non- cancellable operating leases. Before occupying the premises tenants pay SME A a refundable deposit equal to two months' rentals. Deposits held by SME A at 31 December 2019 totalled N$270,000. Rentals received in the year ended 31 December 2019 totalled N$1,550,000, of which N$50,000 relates to January 2020. At 31 December 2019 SME A made the following assessments about the units: Useful life of the buildings: 50 years from the date of acquisition The entity will consume the buildings' future economic benefits evenly over 50 years from the date of acquisition. Assume that the fair value of the units can be determined reliably without undue cost or effort on an ongoing basis and that the residual value of the owner-occupied unit is nil. At 31 December 2019 the fair value of each unit was reliably estimated as N$25,000,000. Required 1. How much is to be credited to bank in january 2019 by SME with respect to invetsment property? 2. What is the amount to be recognise with respect to the non-refundable transfer taxes incurred in acquiring the property by SME A 3.The depeciation to be recognised by SME A on the owner-occupied building in 2019 will amount to? 4.The proportion of the SME A building that is owner- occupied amount to? 5. The proportion of the SME A building that is owner- occupied amount to? 6.The initial property cost of SME A is? 7.What is the cost of SME A's land? 8. The fair value of the SME A investment property at year end amount to? 9. The fair value gain from SME A investment property is 10.SME A rental income for the year amounted to? 11.SME A's rental income liability amount to? 12. The carrying amount of the SME A's property at the year-end amount to
