TMN (Pty) Ltd is a specialist manufacturer of quality water heating solutions. All manufacturing activities take place in the factory premises and warehouse located in the east of Johannesburg. The entity is a registered VAT vendor. VAT is accounted for at a rate of 15%. The current reporting period ends on 31 December 2022.

The accountant knows that you are studying Accounting and requests your assistance with the following matters:

1. Land and Buildings Land and buildings comprise of the factory and warehouse located on stand number 26, Orangefontein. It is the policy of TMN to depreciate buildings on the straight-line method over 25 years. The land was acquired on 1 April 2021 for R1,2 million. The factory and warehouse were constructed at a total cost of R4,8 million. Construction of the factory and warehouse were completed on 1 October 2021.

2. Vehicles Vehicles consist of a delivery truck purchased on 1 January 2020 for R862 500 (incl VAT).

On 31 December 2022, after careful consideration, in order to reflect a better consumption of economic benefits, a decision was taken to change the depreciation method from 20% per annum on the diminishing balance method to the kilometres travelled method. As at that date, it was determined that the truck would be replaced upon reaching 200 000kms. It is estimated that the truck will have a nil residual value.

You obtained the follow odometer readings from the logbooks:

	kms
31 December 2020	25 000
31 December 2021	41 000
31 December 2022	64 000

3. Equipment The following balances appeared on 1 January 2022 in relation to equipment:

	R
Cost	490 000
Accumulated depreciation	(294 000)
	196 000

It is the policy of the entity to depreciate equipment over 5 years using the straight-line method. On 1 February 2022, new equipment was ordered from a supplier in the UK. The equipment was delivered on 1 March 2022, however, due to the specialized nature of the equipment assembly and installation could only be completed on 1 April 2022. As the operator of the equipment was on leave during the month of April the equipment could only be put into use on 1 May 2022. It is expected that the new equipment will have a residual value of R20 000 (excl. VAT).

The following information was taken from the invoice obtained:

	R
Purchase price (incl. VAT)	316 250
Import duties	25 000
Transport costs (excl. VAT)	12 500
Installation and assembly costs (incl. VAT)	34 500
	388 250

A fire broke out on 31 October 2022 which damaged equipment purchased on 1 November 2021 at a cost of R120 000. On 31 October 2022, the value in use was determined as R40 000 while the fair value was determined as R56 000 (excl VAT).

REQUIRED:

Provide the Property, plant and equipment note to the financial statements of TMN (Pty) Ltd for the reporting period ended 31 December 2022

Note: - Comparative figures are not required. - Where applicable, round calculated amounts to the nearest Rand.