You have just been recruited as a financial analyst for Zamfeed Ltd, a Kabwe based animal feed producer. The Chief Financial Officer has requested you to assist with the preparation of a trend statement for Zamfeed. Zamfeedhas been in existence for four years. Figures for the three preceding years are known but those for the fourth year need to be calculated. Unfortunately, the supporting workings for the precedingyears'figures cannot be found and the client's own ledger accounts and workings were destroyed in a recent fire. One item in particular, plant, is causing difficulty and the following figures have been given to you: 12 months ended 31 December 2017 2018 2019 2020 K K K K (A) Plant at cost 80,000 80,000 90,000 ? (28,800) ? ? (B) Accumulated depreciation (16,000) (C) Net (written down) value 64,000 51,200 ? ? The only other information available relates to disposals as follows: Date of Date of Original Disposal Acquisition cost Sales Proceeds 1st disposal 01.04.2019 01.01.2017 15,000 8,000 2nd disposal 01.07.2019 01.01.2017 30,000 21,000 Plantsold was replaced on the same day by new plant. The cost of the plant which replaced the first disposal is not known but the replacement for the second disposal is known to have cost K50,000 Required: i. Identify the method of calculating depreciation used by the client, and contrasti with two other methods recommended by IAS 16. You have just been recruited as a financial analyst for Zamfeed Ltd, a Kabwe based animal feed producer. The Chief Financial Officer has requested you to assist with the preparation of a trend statement for Zamfeed. Zamfeedhas been in existence for four years. Figures for the three preceding years are known but those for the fourth year need to be calculated. Unfortunately, the supporting workings for the precedingyears'figures cannot be found and the client's own ledger accounts and workings were destroyed in a recent fire. One item in particular, plant, is causing difficulty and the following figures have been given to you: 12 months ended 31 December 2017 2018 2019 2020 K K K K (A) Plant at cost 80,000 80,000 90,000 ? (28,800) ? ? (B) Accumulated depreciation (16,000) (C) Net (written down) value 64,000 51,200 ? ? The only other information available relates to disposals as follows: Date of Date of Original Disposal Acquisition cost Sales Proceeds 1st disposal 01.04.2019 01.01.2017 15,000 8,000 2nd disposal 01.07.2019 01.01.2017 30,000 21,000 Plantsold was replaced on the same day by new plant. The cost of the plant which replaced the first disposal is not known but the replacement for the second disposal is known to have cost K50,000 Required: i. Identify the method of calculating depreciation used by the client, and contrasti with two other methods recommended by IAS 16
