NR TRADERS

AN EXTRACT OF THE PRE-ADJUSTMENT TRIAL BALANCE AS AT 31 OCTOBER 20.9

	R
Capital	1 400 000
Drawings	10 000
Trade receivables control...	722 240
Trade payable control.	519 500
Inventory: Trading (1 March 20.9).	19 200
Bank (Favourable)...	63 636
Petty cash.	1016
Cash float..	10 168
Loan from PG Bank	1 034 256
Land..	240 000
Buildings	54 888
Machinery (at cost)..	4 301 232
Accumulated depreciation: Machinery (1 March 20.9)..	?
Vehicle (at cost)...	503 600
Accumulated depreciation: Vehicle (1 March 20.9)	50 360
Fixed deposit: RR Bank..	483 128
Allowances for credit losses..	6 120

Additional information with regards to adjustments that you still need to take into account.

(a) NR Traders acquired machinery NR002 on 1 November 20.6 for an amount R4 301 232 and machinery NR002 was only available for use from 1 February 20.7 due to site preparation and installation that needed to be performed. On 31 August 20.9, machinery NR002 was taken out of production and was auctioned on the same day for a cash amount of R1 820 160. Depreciation on machinery NR002 must be provided at a rate of 20% using the straight-line method.

(b) NR Traders has only one vehicle which was purchased on 1 November 20.7 for an amount of R503 600 and the accounting policy indicate that depreciation on vehicles must be provided at a rate of 10% using the reducing balance method.

The total accumulated depreciation for machinery NR002 to be transferred to asset realisation account on the date of disposal, will be

A.

R 1505 432

B.

R 2 481 072

C.

R 2 222 304

D.

R2 078 928

E.

R716 872