PART A Mars Properties Ltd is a Real Estate Agent dealing with buying, selling and renting land and properties. It owns three properties in strategic localities of the country. All three properties were purchased on 01 October 2017. Details of the purchase price and market values of the properties were as follows: Curepipe Port-Louis Flacq (Property 1) (Property 2) (Property 3) $ 000 $ 000 $ 000 Purchase price 150,000 100,000 120,000 Market value 30 Sept 2018 160,000 110,000 135,000 Market value 30 Sept 2019 170,000 90,000 145,000 Properties 1 and 2 are used by Mars Properties as factories while property 3 is let as a commercial rent. The Director`s of the company are of opinion that the properties should not depreciate on the basis that they are valued at market values that are generally expected to increase over time. REQUIRED (a) Assess whether Mars Properties`s policy of non-depreciation of properties 1, 2 and 3 is in accordance with international financial reporting standards. [5 Marks] (b) Show how the movements in the carrying amount of each property will be reflected in the financial statements of Mars Properties for the years ended 30 September 2018 and 2019. [9 Marks] Where necessary you should justify your treatment with reference to appropriate international financial reporting standards. Page 7 of 8 PART B During 2019, Kolos Cement Ltd decided to construct a showroom for the promotion and marketing of the company`s products. The following costs were incurred: $ 000`s Purchase of materials (before deducting trade discount of 5%) 30,000 Labour costs 25,000 Correction of design error 2,000 Marketing costs associated with promotion of products: - Incurred during construction 1,200 - Incurred after completion of construction 1,500 Safety checks 1,300 Interest costs incurred during construction 3,000 Present value cost at 31 December 2019 of dismantling showroom 1,000 65,000 REQUIRED (a) Outline how the above costs should be accounted for in the financial statements of Kolos Cement Ltd. Show your calculations and provide any explanation to justify your answer. [6 Marks] (b) Show the journal entries that would be required to record the transactions. [5 Marks