QUESTION 1 QUESTION 1: (30 MARKS) Nkunzi (Pty) Ltd is a company that manufactures and sells Gym equipment. During 2020, the company's management decided to increase production capacity. They decided to sell their existing factory building and to rent a new building. At the same time, the machine used to make treadmills was sold and a new one was purchased to replace it The company's year-end is 31 December. The company uses the following depreciation methods for property, plant and equipment straight line method to depreciate buildings, units of production for machinery: diminishing balance method for motor vehicles Nkunzi and all of the companies it transacts with (unless otherwise stated) are registered VAT vendors Details of property, plant and equipment as at 1 January 2020 are as follows: Date purchased Cost Expected useful Residual value (Incl. VAT) life excluding VAT Land 1 Jan 2006 R575 000 Indefinite R80 000 Factory building R345 000 1 July 2006 Machine A 1 January 2014 R862 500 250 000 units Nil Motor vehicles 1 January 2019 R 632 500 6 years R70 000 50 years On 1 September 2020. the land and factory building were sold for a total amount of R1 150 000 (includina VAT) Un the same date, the machine was sold for R9Z 000 invoice amount. At January 2020, machine A nad produced 120 000 units. Between 1 January 2020 and 1 September 2020, the machine had produced a total of 15 000 units A new machine, machine B was purchased from Ggeberha. On 1 April 2020, the machine was loaded onto the truck and arrived at the premises on 1 April 2020. The cost price of R1 150 000 was paid to the supplier (non VAT vendor) on 1 May 2020. Costs to transport the machine from Ggeberha to the premises were R172 500 (including VAT) These transport costs were paid on 5 April 2020. On 10 April 2020, the company can test products on the new machine Costs of manufacturing test products amounted to R28 750 (including VAT), and these were sold for R67 500 (including VAT). The new machine was estimated to be able to produce 450 000 units and had an estimated net selling price of R180 000 (excluding VAT) at the end of its useful life The machine was installed on 5 April 2020 at a cost of R115 000 (including VAT). The machine was ready for use on 1 May 2020. Staff training expense was R11 500 (including VAT). The machine had produced 90 000 units by the end of the financial year The residual value of the vehicle is R70 000 and the depreciation rate is 25% REQUIRED: 1. Calculate the depreciable amount for machine B. You should indicate clearly how this figure has been calculated. (6) 2. Calculate the profit or loss on disposal of the old land and factory building on 1 September 202 0. (8) MU VV, UT DIV machinery and motor vehicles. Ignore the total column (16) NB Use 15% as your VAT rate. Show all calculations clearly as marks are rewarded for calculations. Round off all decimal numbers to the nearest Rand. Attach File