The following information was obtained from the accounting records of T Super and B Man, trading as Superman Traders: 1. Balances as at 28 February 2011: Profit for the year (before depreciation) Asset replacement reserve (1 March 2010).. Capital: T Super.. Capital: B Man. R 574 420 30 000 775 000 Current account: T Super (Dr - 1 March 2010).. Current account: B Man (Cr - 1 March 2010) 775 000 9 750 4 340 10 000 Drawings: T Super. Drawings: B Man.... Long-term loan: US Bank. Inventories. Debtors control. Creditors control. Land and buildings.. Equipment at cost. Accumulated depreciation: Equipment (30 November 2010). Vehicles at cost......... Accumulated depreciation: Vehicles(1 March 2010).. Bank (Cr)......... Allowance for credit losses.. Allowance for settlement discount.... Depreciation (Equipment as at 30 November 2010).. Prepaid expenses (Insurance). 7 630 660 000 835 600 288 850 159 650 1 500 000 280 000 80 000 170 000 24 000 15 130 3 600 5 250 1 860 2 700 2. Additional information: 2.1 Land and buildings consists of: 2.2 2.3 Land - Erf 529 Midrand, bought on 1 March 2008 for R900 000. Building - The building was erected during the year at a total cost of R600 000 and was only occupied on 1 January 2011. On 30 November 2010 equipment with a cost price of R35 000 was sold at a loss of R3 000. At that date, the accumulated depreciation on the equipment sold amounted to R12 060. All the transactions regarding the sale were recorded correctly. Depreciation must still be provided for as follows: Buildings: 2% per annum on the straight line method. Equipment: 10% per annum on the diminished balance method. Vehicles: 20% per annum according to the straight line method. 2.4 Inventories consist of: Merchandise, R830 000 Stationery, R5 600 QUESTION 1 (continued) 2.5 2.6 2.7 The long-term loan was acquired on 1 May 2009 from US Bank and bears interest at a rate of 12% per annum. The loan is secured by a first mortgage over land and is repayable in 5 equal instalments as from 1 January 2012. An amount of R10 000 must be transferred to the asset replacement reserve. The remainder of the total comprehensive income for the year must be distributed between the partners in their profit sharing ratio. 1.2 Prepare ONLY the note in respect of property, plant and equipment