QUESTION 3 (25 marks)

Below are the extracts for BTC Limited and they were extracted as at 1 January 2022 and their year-end is 31st December 2022.

P,000

Head Office Buildings 4,000

Land 2,000

Head Office Buildings acc. depreciation 840

PPE cost 160

PPE acc. depreciation 96

All the above amounts are at cost.

BTC Limited depreciation policy is as follows:

Land is not depreciated

Head Office Buildings are depreciated a 2% yearly on cost using straight line method of depreciation.

PPE depreciated on reducing balance at a rate of 25%

Full year depreciation charged on all new acquisitions and none in the year of disposal on all assets.

The following transactions took place during the year and were not adjusted for as at 31 December 2022.

2nd March 2022 Computers costing P32,000 and NBV of P8,000 were sold for P12,000.

11th June 2022 Purchased new computers at P64,000 to replace old ones and we give as part exchange at a cost of P16,000 and their original value was P32,000 with a net book value of P8,000. Cash paid was only P48,000.

6th October 2022 the building was extended with a conferences room at a cost of P200,000.

Land was revalued upward with P800,000 based on recent property selling rates.

Required.

Using the information above and the adjusting notes prepare the notes for the Property Plant and Equipment (PPE) the financial statements as at 31st December 2022 for the company.

(25 marks)