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FAC3702 ASSIGNMENT 1 SEMESTER 1 2023
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FAC3702 ASSIGNMENT 1 SEMESTER % TRUSTED workings with detailed Answers for A+ Grade.
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FAC3702ASSIGNMENT 1 SEMESTER 1 2023
, Sandy Beans Limited, hereafter “ SandyB” is a camera lens
manufacturing company based in Durban, South Africa. SandyB
manufactures these product for export to various countries.
SandyB has a 30 June financial year end and has adopted to
prepare the financial statements in terms of the International
Financial Reporting Standards. Ignore value added tax.
Administrative building The office building was purchased by
SandyB on 1 March 2017 at a total cost of R2 500 000.
The office building has a total expected useful life of 20 years
and an estimated residual value of R650 000. The office building
does not qualify for any tax allowances. The admin building was
sold on 2 June 2022 for R 2 650 000 to a third party. Office
building SandyB acquired an old office park at a total cost of R6
800 000 in Centurion on 1 July 2017 with the purpose of leasing
out the property.
A three year lease was immediately concluded with Flip Limited.
The lease payments are R80 000 per annum for the first year
escalating at 6% annually. The cost of land is considered
negligible.
The office building has a useful life of 40 years and its residual
value is estimated to be R360 000. As the building was not new
there are no tax allowances granted on the building. At 30 June
2022, the fair value of the property was estimated at R 8 200
000. It is the intention of the company to rent out the property
until the end of its useful life.
Machine Vui On 1 July 2018, SandyB purchased a machine
which is used to manufacture the lens the machine has a total
useful life of seven years and has not changed since the asset
was brought into use. The machine was purchased for R4 200
000. A Chinese supplier has introduced a new machine Yeu that
manufactures the lens in a fraction of the time, SandyB has
decided to purchase this machine Yue but it is estimated to be
delivered in three years due to high demand and scare resources
to manufacture the machine. Management indicated that they will
write-off the machine when the new machine is delivered and
ready for use. Machine Vui was damaged in 2021, although the
machine can work, it is slow in processing the required
production. The production manager estimated that production
will be reduced by 8%.
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