Pykestone plc

You are given the following details of the non-current assets of Pykestone plc, a company

manufacturing and selling timber boarding and timber products, such as doors, window frames and furniture.

	Freehold land and buildings	Plant and manchinery	Motor vehicles	Total
	$	$	$	$
COST
Balance at 1 January 2020	1,000,000	2,749,400	760,000	4,509,400
Additions	500,000	1,952,000	200,000	2,652,000
Disposals	(25,000)	(614,600)	(230,000)	(869,600)
Balance at 31 December 2020	1,475,000	4,086,800	730,000	6,291,800
DEPRECIATION
Balance at 1 January 2020	250,000	904,010	488,000	1,642,010
Charge	18,440	415,750	146,000	580,190
Disposals	(9,380)	(269,760)	(214,000)	(493,140)
Balance at 31 December 2020	259,060	1,050,000	420,000	1,729,060
NET BOOK VALUE
Balance at 1 January 2020	750,000	1,845,390	272,000	2,867,390
Balance at 31 December 2020	1,215,940	3,036,800	310,000	4,562,740

Repairs and maintenance charges:	2020	2019
Buildings	97,000	35,000
Plant and machinery	43,000	25,000
Motor vehicles	25,000	15,000

Profit/losses on disposal

	$
Freehold land and buildings	484,380
Plant and machinery	(267,340)
Motor vehicles	2,000
	219,040

The directors have entered into contracts for purchases of plant and machinery for $500,000 and have decided to purchase further plant and machinery amounting to $450,000, although contract have not yet been placed for these. The directors have also decided that the freehold land and buildings should be revalued at $3,000,000 (on an existing use bases)as at 31 December 2020. The valuation has been carried out by a professional valuer. Depreciation rates are:

• Buildings: over 40 years straight line
• Plant and machinery: from 7.5 % to 15% straight line
• Motor vehicles: 20% straight line

Required:

1. Identify key internal controls for non-current assets
2. Perform analytical review of the information above and prepare a working paper listing (with reasons) the matters that need further explanations from management
3. Suggest audit procedures for Pykestone plc non-current assets