QUESTION 3 (25marks) The following information relates to the extract of BBS Bank Limited as at 1 January 2021 and the year end for BBS Limited is 31st December yearly.

P,000

Buildings cost 2,000

Land cost 1,000

Buildings accumulated depreciation 420

PPE cost 80

PPE accumulated depreciation 48

The depreciation policy for BBS limited is as follows:

a. Land is not depreciated

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

c. PPE depreciated on reducing balance at a rate of 25%

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

The following information relates to transactions that took place during the year to 31st December 2021.

I. 1st March 2021 Computers costing P16,000 and NBV of P4,000 were sold for P6,000.

II. 10th June 2021 Purchased new computers at P32,000to to replace old ones and we give as part exchange at a cost of P8,000 and their original value was P16,000 with a net book value of P4,000. Cash paid was only P24,000.

III. 8th October 2021 the building was extended with a conferences room at a cost of P100,000.

IV. Land was revalued upward with P400,00 based on prevailing market prices.

Required. Prepare extracts of the PPE section in the financial statements with explanatory notes as at 31 December 2021 for BBS Limited. (25 marks)