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QUESTION 4 [ 3 4 marks ] Bookie Books Ltd is a publisher and distributor of textbooks for schools and universities. They have a 3

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QUESTION 4
[34 marks]
Bookie Books Ltd is a publisher and distributor of textbooks for schools and
universities. They have a 31 December year end. Below is the trial balance of Bookie
Books Ltd at 31 December 2022.
Bookie Books Ltd uses the following subsequent measurement bases to value its
property, plant and equipment as well as methods to calculate its depreciation:
The residual value of all assets is zero.
The following are the transactions that occurred during the financial year ended 31
December 2023:
The land was purchased by Bookie Books Ltd on the 1 July 2022 with the
intention of building their own offices on the property in the future. The purchase price was R960000. On 2 January 2023, the fair value of the land was
determined to be R1560000.
Office equipment with a cost price of R48000 was disposed of on the 1 July
for R30000. The office equipment was originally purchased on the 1 January
2020.
No other additions or disposals of office equipment occurred during the year.
On the 31 December 2023, the remaining office equipment had a value in use
of R210000 and fair value less cost to sell of R204000.
Bookie Books Ltd owns three industrial printing machines that were all
purchased on 1 January 2020 for the same cost price of R130000 each. The
three machines were modified on 1 October 2023 in order to allow them to have
embossed printing functionalities, as this is what many customers were
requesting, especially for the front cover of their books. The cost of the
modification parts was R32400 for each machine and will last as long as the
machines' remaining useful lives.
On 1 December 2023, the company serviced the three machines at a cost of
R12600 each. Servicing costs are incurred by the company every year to
ensure that the machines operate as expected.
There were no other modifications/additions or disposals to machinery during
the year.
Bookie Books Ltd has one vehicle. The vehicle was purchased on 1 January
REQUIRED:
Prepare the PPE reconciliation note as at 31 December 2023.
Show all workings clearly.
The total column is not required. The notes on the accounting policy are not required.
Assume all assets are used from their respective purchase dates.
The mark allocation is as follows:
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