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Railway Ltd owns one item of property, plant and equipment, a train that was purchased on 01 January 2020 at a cost of R21 000
Railway Ltd owns one item of property, plant and equipment, a train that was purchased on 01 January 2020 at a cost of R21 000 000. There were no sales and no other purchases of Property. Plant and Equipment. The purchase price paid for the train has been analysed as follows into the estimated cost per significant parts: Description of component Cost Comments R Train carriage 11 000 000 Estimated useful life of 8 years with a residual value of R1 000 000 Engine 10 000 000 Estimated useful life of 4 years with a NIL residual value. Depreciation is provided for using the straight line method (cost method). Required: 2.1. Calculate depreciation for the asset above for the year 2020. 2.2 Prepare the property Plant and Equipment Note to the Statement of Financial Position (12) (8)
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