On 1 April 2020, the land and factory building were sold for a total amount of R900 000 (including VAT). On the same day, the plant was sold for R1 150 000 (invoice amount). At 1 January 2020, plant A had produced 200 000 units. Between 1 January 2020 and 1 April 2020, the machine had produced a total of 48 000 units. A new plant, Plant B was purchased from Thohoyandou. On 1 August 2020, the machine was loaded onto the truck and arrived at the premises on 1 August 2020. The cost price of R1 610 000 was paid to the supplier on 1 September 2020. Costs to transport the machine from Thohoyandou to the premises were R241 500 (including VAT). These transport costs were paid on 5 August 2020. On 10 August 2020, the company ran test products on the new machine. Costs of manufacturing test products amounted to R287 500 (including VAT), and these were sold for R57 500 (including VAT). The new machine was estimated to be able to produce 1 380 000 units and had an estimated net selling price of R432 000 (excluding VAT) at the end of its useful life. The machine was installed on 5 August 2020 at a cost of R161 000 (including VAT). The machine was ready for use on 1 October 2020. Staff training expense was R115 000 (including VAT). The machine had produced 15 000 units by the end of the financial year. The residual value of the delivery vehicle is R30 000 and the depreciation rate is 30%. REQUIRED: 1. Calculate the depreciable amount for Plant B. You should indicate clearly how this figure has been calculated. (6) 2. Calculate the profit or loss on disposal of the old land and factory building on 1 September 2020. (8) 3. Prepare the Property, plant and equipment note for the year ended 31 December 2020, only showing machinery and motor vehicles. Ignore the total column. (16) NB: Use 15% as your VAT rate.QUESTION 1: (30 MARKS) Madoda (Pty) Lid is a company that manufactures and sells cycling equipment. During 2020, the company's management decided to venture into a new line of business. They decided to sell their existing factory building and to rent a new building. At the same time, the machine used to make fins was sold and a new one purchased to replace it. The company's year-end is 31 December. The company uses the following depreciation methods for property, plant and equipment: . straight line method of depreciation for buildings; . units of production for machinery; . diminishing balance method for delivery vehicles. Madoda and all of the companies it transacts with are registered VAT vendors (unless otherwise stated). Details of property, plant and equipment as at 1 January 2020 are as follows: Date purchased Cost Expected useful Residual value (Incl. VAT) life excluding VAT Land 1 Dec 1999 R805 000 Indefinite Factory building 1 Apr 2007 R483 000 100 years Nil Plant A 1 Jun 2016 R1 207 500 1 200 000 units R10 000 Delivery vehicles 1 Aug 2018 R885 500 9 years R30 000 On 1 April 2020, the land and factory building were sold for a total amount of R900 000 (including VAT). On the same day, the plant was sold for R1 150 000 (invoice amount). At 1 January 2020, plant A had produced 200 000 units. Between 1 January 2020 and 1 April 2020, the machine had produced a total of 48 000 units. A new plant, Plant B was purchased from Thohoyandou. On 1 August 2020, the machine was loaded onto the truck and arrived at the premises on 1 August 2020. The cost price of R1 610 000 was paid to the supplier on 1 September 2020. Costs to transport the machine from Thohoyandou to the premises were R241 500 (including VAT). These transport costs were paid on 5 August 2020. On 10 August 2020, the company ran test products on the new machine. Costs of manufacturing test products amounted to R287 500 (including VAT). and these were sold for R57 500 (including VAT)