Peterson $($Pty$)$ Ltd is a manufacturer of quality leather handbags situated at Sandton. The financial yearend of the company is $31$ December.

Plant

A plant was acquired on $1$ March $2022$ from Xing Limited in China and the following costs were incurred and paid on that date:

NUMBERS QUESTIONS MARKS TIME IN MINUTES

$1$ Question One $35$

$75$

$2$ Question Two $30$

$75$

$3$ Question Three $35$

$30$

$$ Supplier invoice amounted to R$53600$;

$$ Delivery fee amounted to R$1000$;

$$ Staff training costs on how to use the machine totaled R$1200$;

$$ Import duties amounted to R$900$; and

$$ Installation costs of R$500$ were also incurred.

The estimated useful life at acquisition date was $10$ years and the estimated residual value was R$8000.$

Production commenced on $15$ April $2022,$ even though the plant was available for use on $1$ April $2022.$

During $2023$ a burst pipe in the building resulted in significant damage to the plant. As a result the directors performed an impairment test and determined that the recoverable amount of the plant was estimated to be R$34400$ at $31$ December $2023.$

During January $2024$ repairs and maintenance on the plant were carried out at a cost of R$3000$ paid for by Peterson. As a result of this maintenance, another impairment test was performed as at $31$ December $2024$ and the fair value of the plant was R$46000,$ cost to sell R$1600,$ and value in use was R$47000.$

Peterson has pledged this plant as a security for a loan with the Standard Bank, valued at R$40000.$

Additional information

$$ Peterson$$s turnover is less than R$1$ million per annum and therefore it is not a registered

VAT vendor.

$$ Peterson uses the cost model to account for its plant.

SARS grants a wear and tear allowance of $20\%$ per annum on the plant $($not apportioned for time$).$

The tax rate changed from $29\%$ in $2023$ to $28\%$ in $2024.$

You are required to:

a$)$ Prepare all the journal entries relating to the plant from the date of its acquisition to $31$ December $2024.$ Do not provide journal entries relating to current or deferred tax. Journal narrations are not required

b$)$ Provide the journal entry to account for the tax rate change and briefly, in no more than

two sentences, explain why this entry is necessary.

c$)$ Prepare the accounting policy note for plant for the year ended $31$ December $2024.$

d$)$ Prepare the following notes to the financial statements of Peterson $($Pty$)$ Ltd for the year

ended $31$ December $2024$:

i$.$ Plant

ii$.$ Deferred tax$\backslash$table$[[$NUMBERS$,$QUESTIONS,MARKS,TIME IN MINUTES$],[1,$Question One,$35,75],[2,$Question Two,$30,75],[3,$Question Three,$35,30]]$