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 $2022.$

Note DR CR

Land $1960000$

Office Equipment $2600000$

Accumulated depreciation: Office Equipment $2294000$

Machinery $3390000$

Accumulated depreciation: Machinery $3195000$

Vehicles $4576000$

Accumulated depreciation: Vehicles $4?$

Bookie Books Ltd uses the following subsequent measurement bases to value its

property, plant and equipment as well as methods to calculate its depreciation:

Asset class Depreciation

method

Useful life$/$

Depreciation rate

Subsequent

measurement

model

Land N$/$A N$/$A Revaluation model

Office

Equipment

Straight line $10$ years Cost model

Machinery Straight line $6$ years Cost model

Vehicles Diminishing balance $20\%$ Cost model

The residual value of all assets is zero.

The following are the transactions that occurred during the financial year ended $31$

December $2023$:

$1.$ 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

$11$ HFAC$130-1-$JanJun$2024-$SA$1-$GC$-$V$\mathrm{.}2-25032024$

price was R$960000.$ On $2$ January $2023,$ the fair value of the land was

determined to be R$1560000.$

$2.$ Office equipment with a cost price of R$48000$ was disposed of on the $1$ July

for R$30000.$ 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 R$210000$ and fair value less cost to sell of R$204000.$

$3.$ Bookie Books Ltd owns three industrial printing machines that were all

purchased on $1$ January $2020$ for the same cost price of R$130000$ 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 R$32400$ 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

R$12600$ 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.

$4.$ Bookie Books Ltd has one vehicle. The vehicle was purchased on $1$ January

$2021.$

REQUIRED:

Prepare the PPE reconciliation note as at $31$ December $2023.$

Show all workings clearly.

$12$ HFAC$130-1-$JanJun$2024-$SA$1-$GC$-$V$\mathrm{.}2-25032024$

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:

Land $(2$ marks$)$

Office Equipment $(14$ marks$)$

Machinery $(11$ marks$)$

Vehicles