QUESTION $2$: IAS $16$ PROPERTY, PLANT & EQUIPMENT $[25$ MARKS$]$

Armstrong Limited commenced with the manufacturing of wood products in $2023$ at a

new plant and is a registered VAT vendor in the Republic. The plant was purchased

on $1$ January $2023$ for R$798000.$

During January $2023,$ some equipment was installed and other equipment was modified.

Installation and modification costs incurred amounted to R$148200.$ For security reasons

a fence was erected at the plant at the cost of $22800.$ The plant was ready for use on $1$

February $2023.$ An opening function was held in the plant on $15$ February $2023$ at a cost

of $57000$ in order to entertain customers and to introduce the new product to be

manufactured at this pant. Production only started on $1$ March $2023.$

The plant has a useful life of $10$ years and the residual value was estimated at R$200$

$000$ excluding VAT. Expected scrapping costs amount to R$140000($discounted

present value of scrapping costs equals R$100000)$ excluding VAT. Assume that the

provision for the scrapping costs shall be raised in accordance with IAS$37.$

At the end of August $2023,$ heavy rain caused severe damage to the houses of the

employees in the region. Management granted special leave to all the employees of

the plant, to attend to the repair of their houses. The plant stood idle during September

$2023.$

The company$$s year$-$end is $31$ December.

All amounts are inclusive of VAT unless otherwise stipulated

Required:

$2\mathrm{.}1$ Calculate the cost of the plant $[14]$

$2\mathrm{.}2$ Calculate the depreciable amount of the plant $[4]$

$2\mathrm{.}3$ Calculate depreciation for the year ended $31$ December $2023[4]$

$2\mathrm{.}4$ Calculate the carrying amount of the plant at $31$ December $2023.[3]$