REQUIRED:

a) Disclose the following assets in Property, plant and equipment in accordance with IAS 16 for Anthol Limited for the reporting period ended 31 December 2020:

i) Land and Buildings

ii) Furniture (25)

Please note: The total column of the note is not required. Accounting policy notes are not required. Show all calculations and reference clearly. Round off to the nearest Rand amount where applicable.

b) Recognise the transactions related to Vehicle A, B and C in the records (general journal) of Anthol Limited for the reporting period ended 31 December 2020. (20)

Please note: Journal narrations are not required. Dates must be indicated correctly. Calculations must be shown clearly as part of the relevant journal entry. Calculated amounts must be rounded to the nearest Rand where applicable. c) Disclose the change in estimate note for the reporting period ended 31 December 2020. Show all calculations

QUESTION 2 (50 MARKS) (60 MINUTES) Anthol Limited is a company headquartered in the northern suburbs of Johannesburg. Anthol Limited and all its suppliers are registered VAT vendors. A VAT rate of 15% is applicable. The accountant requests your assistance in the preparation of the financial statements for the year end. You are provided with the following information for the financial year ended 31 December 2020: 1. LAND AND BUILDINGS Anthol Limited operates from its headquarters (the only property in the asset register) which was acquired for R8 200 000. The land is valued at R4 500 000. Anthol Limited depreciates buildings on a straight-line basis over the estimated useful life of 25 years. A residual value of 10% is applicable. Although the property was registered on 1 December 2017, management decided that they would only move into the new building on 2 January 2018 after the festive break in December. On 2 January 2018 the first group of employees moved into the building. 2. FURNITURE All furniture was acquired on the same day on 1 October 2018. It is the accounting policy of Anthol Limited to depreciate these assets at 20% on the diminishing balance method with no residual value. The purchase price of the furniture was R667 000 (including VAT). A fire broke out in one of the offices which resulted in damage to the furniture on 30 September 2020. As at that date it was determined that the furniture had a recoverable amount of R250 000. 3. VEHICLES All the vehicles are used for delivery purposes and the accounting policy is to depreciate vehicles on a straight-line basis over 5 years with no residual value. 3.1 Vehicle A As at 1 January 2020, Vehicle A had a cost of R350 000 and a carrying value of R150 000. This vehicle was sold for cash on 30 September 2020. The following journal was passed on the date of the sale: Cr 2020 30 Sep Dr 149 500 Bank (SFP) Proceeds on sale of vehicle (P/L) Recognition of sale of Vehicle A 149 500 3.2 Vehicles B and C Vehicle B was traded in for Vehicle C, a new delivery vehicle on 31 March 2020. According to the asset register, Vehicle B had a cost price of R400 000 and accumulated depreciation of R240 000 as at 1 January 2020. The invoice price of Vehicle Camounted to R517 500. A trade-in credit of R172 500 (including VAT) was agreed upon. The balance was settled with a bank loan. 4. EQUIPMENT Specialised equipment was ordered on 1 June 2018 and delivered on 1 July 2018. The invoice price was R1 173 000 (including VAT). At that date, it was determined that the equipment would be depreciated over 10 years on the straight-line method with no residual value. Installation costs amounted to R40 000 (excl. VAT), whilst initial operating losses totalled R100 000. Costs to transport the equipment amounted to R8 000 (excluding VAT). At the end of the current reporting period, management decided to change the method of depreciation to the units of production method. It is expected that the equipment will be able to produce 100 000 units of its expected useful life. The following units were produced since acquisition: 2018 2019 2020 Units produced 8 000 20 000 25 000