Practice Problem PPE1.0 (LO 2) Wanzao Manufacturing purchases a factory machine at a cost of R207,000 (VAT inclusive) on January 1, 2020. Wanzao expects the machine to have a residual value of 20,000 at the end of its 4-year useful life. During its useful life, the machine is expected to be used 160,000 hours. Actual annual hourly use was 2020, 40,000; 2021, 60,000; 2022, 35,000; and 2023, 25,000. REQUIRED: a) Prepare depreciation schedules for the following methods: (1) straight-line, (ii) units- of-activity, and (ii) declining-balance using double the straight-line rate. b) In a recent newspaper release, the CEO of Wanzo OAO asserted that something must be done about depreciation. The CEO said, "Depreciation does not come close to accumulating the cash needed to replace the asset at the end of its useful life." Draft a memo to the CEO to explain his concerns. [Submit your answers using the BB link provided] Practice Problem PPE2.1. The following expenditures were incurred by Rosenberg Construction in purchasing land: cash price R1 280 000, Municipal Rates and Taxes (accrued) R60,000, attorneys' fees R50 000, real estate agency's commission R40,000, and clearing and grading R88 000. Determine the cost of land and give the journal entry? Practice Problem PPE 2.2: At the end of its first year of operations, Brianna Industries chose to use the revaluation framework allowed under IAS16. Brianna's ledger shows Equipment R480,000 and Accumulated Depreciation-Equipment R60,000. Prepare journal entries to record the following assumptions. a) Independent appraisers determine that the plant assets have a fair value of R468,000. b) Independent appraisers determine that the plant assets have a fair value of R400,000 Practice Problem PPE2.3. Anna Tremble has prepared the following list of statements about depreciation. a) Depreciation is a process of asset valuation, not cost allocation. b) Depreciation provides for the proper matching of expenses with revenues. c) The carrying amount of a plant asset should approximate its fair value. d) Depreciation applies to three classes of plant assets: land, buildings, and equipment. e) Depreciation does not apply to a building because its usefulness and revenue- producing ability generally remain intact over time. f) The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence. g) Recognising depreciation on an asset results in an accumulation of cash for replacement of the asset. h) The balance in accumulated depreciation represents the total cost that has been charged to expense. i) Depreciation expense and accumulated depreciation are reported on the income statement. CACN012- Accounting for Plant assets. 1) Three factors affect the computation of depreciation: cost, useful life, and residual value. Instructions Identify each statement as true or false. If false, indicate how to correct the statement