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QUESTION 1 Queens ( Pty ) Ltd is a company with a 3 1 December year end. The companys mainbusiness is the buying and selling
QUESTION Queens Pty Ltd is a company with a December year end. The companys mainbusiness is the buying and selling of sports equipment Financial year:On March Queens Pty Ltd bought a property and paid R in cashfor the property. The property was bought with the intention of keeping it for investmentpurposes and a lease agreement was therefore entered into with a third party. In termsof the lease agreement, the third party will occupy Queens Pty Ltds property from April for a period of months Financial year:The property continued to be rented out by Queens Pty Ltd to the third party for thefull financial year in terms of the lease agreement entered into during the financialyear Financial year:The lease agreement with the third party came to an end on March QueensPty Ltd decided not to renew the lease agreement with the third party since theyrequire additional warehouse space, and therefore, effective April QueensPty Ltd will use the property as one of their warehouses.Additional information: The company makes use of the fair value model to account for investment property. The following fair values were applicable to the property:o December Ro December Ro April R Owneroccupied property is accounted for using the cost model. For all financial years, assume a corporate tax rate of and a capital gainsinclusion rate of REQUIRED: With reference to the information given, discuss how Queens Pty Ltd shouldclassify and recognise the property on March Prepare all the general journal entries required in the records of Queens PtyLtd to account for only the property for the December financial year.Dates and narrations are not required. Round all calculated amounts to thenearest rand where applicable. mark With reference to the requirements of IAS discuss how Queens Pty Ltdshould account for the property in their records from April Include inyour discussion references to the applicable amounts.
QUESTION
Queens Pty Ltd is a company with a December year end. The companys mainbusiness is the buying and selling of sports equipment Financial year:On March Queens Pty Ltd bought a property and paid R in cashfor the property. The property was bought with the intention of keeping it for investmentpurposes and a lease agreement was therefore entered into with a third party. In termsof the lease agreement, the third party will occupy Queens Pty Ltds property from April for a period of months Financial year:The property continued to be rented out by Queens Pty Ltd to the third party for thefull financial year in terms of the lease agreement entered into during the financialyear Financial year:The lease agreement with the third party came to an end on March QueensPty Ltd decided not to renew the lease agreement with the third party since theyrequire additional warehouse space, and therefore, effective April QueensPty Ltd will use the property as one of their warehouses.Additional information: The company makes use of the fair value model to account for investment property. The following fair values were applicable to the property:o December Ro December Ro April R Owneroccupied property is accounted for using the cost model. For all financial years, assume a corporate tax rate of and a capital gainsinclusion rate of
REQUIRED:
With reference to the information given, discuss how Queens Pty Ltd shouldclassify and recognise the property on March
Prepare all the general journal entries required in the records of Queens PtyLtd to account for only the property for the December financial year.Dates and narrations are not required. Round all calculated amounts to thenearest rand where applicable. mark
With reference to the requirements of IAS discuss how Queens Pty Ltdshould account for the property in their records from April Include inyour discussion references to the applicable amounts.
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