Question
QUESTION 1 (MARKS: 25, 45 MINUTES) Beesting Boots (Pty) Ltd is a vehicle manufacturing company. Ben Bothma the owner of Beesting Boots inherited the
QUESTION 1 (MARKS: 25, 45 MINUTES) Beesting Boots (Pty) Ltd is a vehicle manufacturing company. Ben Bothma the owner of Beesting Boots inherited the business from his grandfather. Beesting Boots is registered for Value added tax (VAT) and VAT at 14% is applicable. Beesting Boots adopted a policy to only purchase from registered vat vendors. The following extract was taken from the financial records of Beesting Boots on 1 January 2017. Land at fair value Building Motor vehicle Machinery Cost Price Fair Value R700 000(VAT exclusive) ? Accumulated depreciation R240 000 Depreciation method 5% reducing balance 20% straight line Units of production Carrying amount R320 000 3. 2. The following transactions took place in the books Beesting Boots. 1. On 1 January 2008 Beesting Boots acquired land situated on erf 22 Marlyn for R320 000 (14% VAT exclusive). In the current financial, year a building was erected and the total material and labour cost amounted R980 400 (14% VAT inclusive). The building was available for use on 1 August 2017 but was only occupied on the 1 September 2017. On the 1 January 2017 the land was revalued at fair value by Mr David Dawn, a sworn appraiser. On 30 June 2017, a delivery vehicle was traded in. The vehicle was originally purchased for R100 000 (14% VAT exclusive) and accumulated depreciation on 1 January 2017 amounted to R30 000. The vehicle was traded in on a new vehicle having a cost price of R120 000 (14% VAT exclusive). The trade in value amounted to R91 200 (VAT inclusive). Beesting Boots purchased machine in Johannesburg that is able to reduce the time spent on manufacturing boot spoilers for all vehicle types. The following cost were incurred Purchase price R342 000 ( 14% VAT inclusive) Transportation cost of R50 000 ( 14% VAT exclusive) Installation fees of R30 000 (14% VAT exclusive) Training cost for staff to ensure the asset can be properly operated amounted to R12 000 Management expects the machine to produce 100 000 units during the machine's economic useful life. On 31 December 2016 the machine produced 10 000 units, the total amounts of units produced for the current financial year-end 31 December 2017 is 15 000 units by the end. REQUIRED QUESTION 1 Sub-total Total 1. Prepare the Property, Plant and Equipment note of Beesting Boots for the year ending 31 December 2017. (Total column is not required) 24 24 Communication- and Layout Skills 1 24 25 25 Comparative figures are not required SHOW ALL CALCULATIONS!!!!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started