QUESTION 1 (19 Marks: 34 Minutes) Sipho's Pizza Hut is situated in Grahamstown and is the local pizza shop. Sipho's Pizza Hut began operating on 1 March 2017 when it purchased all of its kitchen equipment. The business is a VAT registered vendor. VAT is levied at 15%. On 27 December 2019, a fire started in the kitchen after an employee forgot to switch off one of the ovens. All the kitchen equipment was damaged. The recoverable amount of the kitchen equipment was calculated to be R20 000. You have been provided with the following information: R Fixed asset register at 28 February 2019 (Extract) Kitchen Equipment Cost Carrying amount Depreciation method: Diminishing balance method (20% per annum) 120 000 76 800 On 28 December 2019, Sipho's Pizza Hut negotiated a trade-in of R18 000 (VAT exclusive) for all the damaged kitchen equipment with Mr P Equipment. The replacement kitchen equipment cost R180 000 (VAT exclusive). This new equipment was delivered on the same day and was immediately available for use. The net amount owing to Mr P Equipment will be paid on 1 April 2020. R Fixed asset register at 28 February 2019 (Extract) Kitchen Equipment Cost Carrying amount Depreciation method: Diminishing balance method (20% per annum) 120 000 76 800 On 28 December 2019, Sipho's Pizza Hut negotiated a trade-in of R18 000 (VAT exclusive) for all the damaged kitchen equipment with Mr P Equipment. The replacement kitchen equipment cost R180 000 (VAT exclusive). This new equipment was delivered on the same day and was immediately available for use. The net amount owing to Mr P Equipment will be paid on 1 April 2020. REQUIRED: Prepare all journal entries for the financial year ended 29 February 2020 relating to the kitchen equipment in the accounting records of Sipho's Pizza Hut. (19 Marks)