FAC3702 ASSIGNMENT 1 SEMESTER 2 OF 2022

FAC3702 ASSIGNMENT 1 – SEMESTER 2 OF
2022
(a) Notes to the Financial Statements of CareFirst Ltd for the year ended 31
December 2021

1. Profit before tax

Included in profit before tax are the following

R
Incomes
Rental income (15 000 * 7) 105 000
Fair value adjustment [(150 000 + 480 000) − (130 000 + 45 000
455 000)]
Profit on disposal of equipment [187 500 (𝐶5) − 109 375 (𝐶5)] 78 125

Expenses
Monthly security fees (550 * 12) 6 600
Loss on sale of materials (25 000 − 15 000) 10 000
Depreciation [(𝐶2), (𝐶3)& (𝐶5)(39 787 + 27 267 + 53 125)] 120 179



2. Property, plant & equipment

Land Buildings Ambulance Medical
Equipment
R R R R
Carrying amount at beginning of year 220 000 1 594 237 - 125 000
Cost (𝐶1 & 𝐶2) 220 000 1 611 000 - 250 000
Accumulated Depreciation (𝐶2) 0 (16 763) - (125 000)

Revaluation (𝐶1) 65 000
Depreciation for the year [(𝐶2), (𝐶4)& (𝐶5)] (39 787) (27 267) (53 125)
Additions at cost (𝐶5) 725 000 187 500
Disposals at carrying amount (𝐶5) (109 375)
Carrying amount at end of year 285 000 1 554 450 697 733 150 000
Cost / Gross Carrying amount 285 000 1 611 000 725 000 187 500
Accumulated Depreciation 0 (56 550) (27 267) (37 500)


Land was revalued on 31 December 2021 by an independent sworn appraiser.
The carrying amount of the land if it was carried at cost would have amounted to R220
000.

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