Question 1 Trial balance extracts at 30 September 2019 $'000 Land at cost on 30 September 2018 50,000 Plant and equipment at cost 76,600 Accumulated depreciation at 30 September 2018 Plant 24,600 Capitalised development expenditure at 30 September 2018 20,000 Non-current assets - tangible: The land was acquired on the 30 September 2018. The company's policy is to revalue its land at each year end and at 30 september 2019 it was valued at $53 million. On 1 October 2018 an item of plant was disposed of for $2.5 million cash. The proceeds have been treated as sales revenue by the business. The plant is still included in the above trial balance figures at its cost of $8 million and accumulated depreciation of $4 million to the date of disposal). All plant is depreciated at 20% per annum using the reducing balance method. Depreciation and amortisation of all non-current assets is charged to cost of sales. Non-current assets intangible: In addition to the capitalised development expenditure (of $20 million), further research and development costs were incurred on a new project which commenced on 1 October 2018. The research stage of the new project lasted until 31 December 2018 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2019 the directors became confident that the project would be successful and yield a profit well in excess of its costs. The project is still in development at 30 September 2019. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. All expensed research and development are charged to cost of sales. Question 2 Mark Limited is an investment company that purchases buildings and holds them for a number of purposes such as resale, leasing and its own use. On 1 January 2019, Mark Limited purchased an old building, Mark Towers, for N$300 000 Conveyancer's fees amounted to N$20 000 This building is situated in an isolated part of Durban (South Africa) and there is no development anywhere nearby. At the time of purchase, there had been no property transactions in this area for many years and the possibility of leasing the building to tenants was remote . During November 2019, development began of a new industrial Park in the area. As a result, the building was able to be leased to tenants involved in the development of the industrial park. Due to the influx of people of people into the area, the directors decided to paint one side of the buildings with the corporate logo of Mark Limited. This building has never had an air-conditioning system. After numerous complaints from tenants about not being able to tolerate the Durban heat, Mark Limited decided to upgrade the building by installing a ducted air-conditioning system on 1 December 2019. The cost of installation included the following: Adjustments to the structure of the building 30 000 Painting 50 000 Air-conditioning system 200 000 Installation costs 50 000 The ducted air-conditioning system has a 10 year life and a nil residual value . As a result of the new industrial park, there was suddenly a demand for properties in the area. As a result, the fair value of Mark Towers was able to be determined on 31 December 2019 at N$420 000. Mark Limited would like to measure this investment property at fair value now that fair values have become available. The building has a 10 year useful life and an estimated residual value of N$50 000 Mark Limited also holds other investment property, which is measured under the fair value model. The fair value of this other investment property is as follows: 1 January 2019 N$ 1 000 000 31 December 2019 NS 1 250 000 Questions Agiro arribed as bonyo despacho tot can browsed on caphere to break the greenhouse grottet The accountant les more that I am has been iraud and paid for, beteren 2016 2018 but has been told by the sudions to the role wachtlamurid tortor soomectand given the significant amounts and they will have to wait the outer's report anal corrected. The audir deyild hinta on the rong but was not done so nich at the asginal detail priced to him by the chest The child has bbled the following details down for you regarding the work done on This project by his daarmee to: Memorandum From:Chief Scient Ta Financial Account Balaw planna find any at vera that curred butween 2016 and 2010. 2010 . We spent 175 100 145% chand on the working on the development of the chemical. We were in the way stage of the project in 2016 and thus we were not yet uit while . We spent $287 m latich was and in curia Watada ning can nou projectes de chically feasible. you renanter, you were naround and that con ind something you need to the region crai, had albo et annot sure what this means to your anything, but has the one thamaning bed in my dary) . Dre at the back from and thing about recoveable amount of 16775000 31 31 December 2017. at sure whose meant bumaybe inportant to you that to do we Cienky nad going into concertion with us Firecall . This is a bad year son our project is ponded in January due to me geant compte pound by CleanSky Lribed. We were forced to cart budgets wd perfomet precious and such to tu potes riviste Oblously. The owo wodyed in SS 250 On this rese (which wassed the avremo . We wengine to pochod in bent une cur walk and spent 29 30 Dear the rest of the poor My records roller that your department coded that your in ons and recognoverator on Wenenetrom Foy-on and your recoverable amount on 31 December 2012 auto be NS1 360000.By the way, the 5348 0.89 Dienst . We finished our project and Chinese - maybe a day or so balore Now Year I can't recally. So we were ready to go in production ham Juary 2012 buttore reason production de mathappen urt 1 April 2012 Hope this The courtant has shown you this moment and has asked that you show how should account for this project He als you to the project has a useful to of 5 years, ani residual und amortization becaused on the grown Question 4 In 2019 SME A incurred and paid the following spendues in acquiring property consisting of tenisichold detached houses each with separate legalite including the land on which it is buiti Date Amount (NS) Additional Information 1 Januny 2019 200,000,000 20 per cent of the price is atributable to the land 1 January 2018 20,000,000 Non-refundable transfer taxes (not included in the N$200,000.000 purch pril 1.Juny 2010 1.000.000 Legal directly atributable to the acquiston 1 January 2018 10.000 Reimbursing the previous owner for prepaying the non- redundatiocal government property Inces for a month period ending 30 June 1 January 2013 500.000 Advertising campaign to atractants 2 Januwy 2018 200,000 Opening function to celebrate new rental business that de corage by the local press 30 June 2019 20 000 Non-refundable Annual local government property for the year ending 30 June 2020 Throughout 2019 120,000 Day to day repairs and maintenance, inducing the salary and other costs of the administration and maintenance staff. These costs are atributable equally to each of the units 2019 SME A Use one of the venunits to accommodate ts administration and maintenance statt. The other nients are rented to Independent third pardes under non-cancellable operating lases. Before occupying the premises nants pay SME A a refundable deposite wo months rentak. Deposits held by SME A 31 December 2009 alked N$270,000 Rentals received in the year ended 31 December 2018 totaled N$1,550,000, of which N550,000 relates to January 2020 At 31 December 2019 SME A made the following sements about the units: Userul le of the buildings: 50 years from the date of acquisition The entity will consume the buildings future economic benefis evenly over 50 years from the date of acquisition Assume that we fair value of the unit can be determined reliably without undue color effort on an ongoing basis and that the residual value of the owner-occupied unit is nil. At 31 December 2019 the fair value of each unit was reliably esimesed as N$25,000,000 Question 1 Trial balance extracts at 30 September 2019 $'000 Land at cost on 30 September 2018 50,000 Plant and equipment at cost 76,600 Accumulated depreciation at 30 September 2018 Plant 24,600 Capitalised development expenditure at 30 September 2018 20,000 Non-current assets - tangible: The land was acquired on the 30 September 2018. The company's policy is to revalue its land at each year end and at 30 september 2019 it was valued at $53 million. On 1 October 2018 an item of plant was disposed of for $2.5 million cash. The proceeds have been treated as sales revenue by the business. The plant is still included in the above trial balance figures at its cost of $8 million and accumulated depreciation of $4 million to the date of disposal). All plant is depreciated at 20% per annum using the reducing balance method. Depreciation and amortisation of all non-current assets is charged to cost of sales. Non-current assets intangible: In addition to the capitalised development expenditure (of $20 million), further research and development costs were incurred on a new project which commenced on 1 October 2018. The research stage of the new project lasted until 31 December 2018 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2019 the directors became confident that the project would be successful and yield a profit well in excess of its costs. The project is still in development at 30 September 2019. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. All expensed research and development are charged to cost of sales. Question 2 Mark Limited is an investment company that purchases buildings and holds them for a number of purposes such as resale, leasing and its own use. On 1 January 2019, Mark Limited purchased an old building, Mark Towers, for N$300 000 Conveyancer's fees amounted to N$20 000 This building is situated in an isolated part of Durban (South Africa) and there is no development anywhere nearby. At the time of purchase, there had been no property transactions in this area for many years and the possibility of leasing the building to tenants was remote . During November 2019, development began of a new industrial Park in the area. As a result, the building was able to be leased to tenants involved in the development of the industrial park. Due to the influx of people of people into the area, the directors decided to paint one side of the buildings with the corporate logo of Mark Limited. This building has never had an air-conditioning system. After numerous complaints from tenants about not being able to tolerate the Durban heat, Mark Limited decided to upgrade the building by installing a ducted air-conditioning system on 1 December 2019. The cost of installation included the following: Adjustments to the structure of the building 30 000 Painting 50 000 Air-conditioning system 200 000 Installation costs 50 000 The ducted air-conditioning system has a 10 year life and a nil residual value . As a result of the new industrial park, there was suddenly a demand for properties in the area. As a result, the fair value of Mark Towers was able to be determined on 31 December 2019 at N$420 000. Mark Limited would like to measure this investment property at fair value now that fair values have become available. The building has a 10 year useful life and an estimated residual value of N$50 000 Mark Limited also holds other investment property, which is measured under the fair value model. The fair value of this other investment property is as follows: 1 January 2019 N$ 1 000 000 31 December 2019 NS 1 250 000 Questions Agiro arribed as bonyo despacho tot can browsed on caphere to break the greenhouse grottet The accountant les more that I am has been iraud and paid for, beteren 2016 2018 but has been told by the sudions to the role wachtlamurid tortor soomectand given the significant amounts and they will have to wait the outer's report anal corrected. The audir deyild hinta on the rong but was not done so nich at the asginal detail priced to him by the chest The child has bbled the following details down for you regarding the work done on This project by his daarmee to: Memorandum From:Chief Scient Ta Financial Account Balaw planna find any at vera that curred butween 2016 and 2010. 2010 . We spent 175 100 145% chand on the working on the development of the chemical. We were in the way stage of the project in 2016 and thus we were not yet uit while . We spent $287 m latich was and in curia Watada ning can nou projectes de chically feasible. you renanter, you were naround and that con ind something you need to the region crai, had albo et annot sure what this means to your anything, but has the one thamaning bed in my dary) . Dre at the back from and thing about recoveable amount of 16775000 31 31 December 2017. at sure whose meant bumaybe inportant to you that to do we Cienky nad going into concertion with us Firecall . This is a bad year son our project is ponded in January due to me geant compte pound by CleanSky Lribed. We were forced to cart budgets wd perfomet precious and such to tu potes riviste Oblously. The owo wodyed in SS 250 On this rese (which wassed the avremo . We wengine to pochod in bent une cur walk and spent 29 30 Dear the rest of the poor My records roller that your department coded that your in ons and recognoverator on Wenenetrom Foy-on and your recoverable amount on 31 December 2012 auto be NS1 360000.By the way, the 5348 0.89 Dienst . We finished our project and Chinese - maybe a day or so balore Now Year I can't recally. So we were ready to go in production ham Juary 2012 buttore reason production de mathappen urt 1 April 2012 Hope this The courtant has shown you this moment and has asked that you show how should account for this project He als you to the project has a useful to of 5 years, ani residual und amortization becaused on the grown Question 4 In 2019 SME A incurred and paid the following spendues in acquiring property consisting of tenisichold detached houses each with separate legalite including the land on which it is buiti Date Amount (NS) Additional Information 1 Januny 2019 200,000,000 20 per cent of the price is atributable to the land 1 January 2018 20,000,000 Non-refundable transfer taxes (not included in the N$200,000.000 purch pril 1.Juny 2010 1.000.000 Legal directly atributable to the acquiston 1 January 2018 10.000 Reimbursing the previous owner for prepaying the non- redundatiocal government property Inces for a month period ending 30 June 1 January 2013 500.000 Advertising campaign to atractants 2 Januwy 2018 200,000 Opening function to celebrate new rental business that de corage by the local press 30 June 2019 20 000 Non-refundable Annual local government property for the year ending 30 June 2020 Throughout 2019 120,000 Day to day repairs and maintenance, inducing the salary and other costs of the administration and maintenance staff. These costs are atributable equally to each of the units 2019 SME A Use one of the venunits to accommodate ts administration and maintenance statt. The other nients are rented to Independent third pardes under non-cancellable operating lases. Before occupying the premises nants pay SME A a refundable deposite wo months rentak. Deposits held by SME A 31 December 2009 alked N$270,000 Rentals received in the year ended 31 December 2018 totaled N$1,550,000, of which N550,000 relates to January 2020 At 31 December 2019 SME A made the following sements about the units: Userul le of the buildings: 50 years from the date of acquisition The entity will consume the buildings future economic benefis evenly over 50 years from the date of acquisition Assume that we fair value of the unit can be determined reliably without undue color effort on an ongoing basis and that the residual value of the owner-occupied unit is nil. At 31 December 2019 the fair value of each unit was reliably esimesed as N$25,000,000