Question 4

The following balances at 1/01/17 are taken from the books of Diamond Ltd whose financial statements are prepared to 31 December each year.

P

Land @ cost 1,000,000

Buildings @ cost 500,000

Buildings (Accumulated depreciation) 210,000

Plant & equipment @ cost 40,000

Plant & equipment (Accumulated depreciation) 24,000

The company's depreciation policies are as follows.

• Depreciation is not charged on Land.
• Building has depreciation provided at 2% per annum on cost on the straight line basis.
• Plant & equipment its depreciation is provided at 25% per annum on the reducing balance basis.
• A full year's deprecation is charged in the year of acquisition of all assets and none in the year of disposal.

During the year to 31/12/17 the below transactions took place.

1/03/17 Office equipment with a cost of P8,000 with a net book value of P2,000 was sold for P3,000.

10/06/17 The office equipment which was purchased at a cost of P16,000 was to replace some old items which were given in part exchange. The agreed part exchange value was P4,000 and its original cost was P8,000 and had a net book value of P2,000. The company paid a balance of P12,000 cash.

8/10/17 The building was extended at a cost of P50,000.

In preparing the financial statements at 31/12/17, land was revalued upwards with P200,000 to reflect the recent market survey.

Required:

Do the Property, Plant&Equipment statement for Diamond Ltd as it should appear in the explanatory notes for the financial statements.25marks