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FAC3761 ASSIGNMENT 3 OF 2020
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Answers study book International Financial Reporting Standards of Hennie van Greuning - ISBN: 9780821367698 (Detailed Assignment)
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FAC3761 ASSIGNMENT 3 OF 2020QUESTION 1
LOOK & FIND LTD
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH
2020
1. PROPERTY, PLANT & EQUIPMENT
Land Buildings Equipment Vehicles
R R R R
Carrying amount at the beginning of the year 600 000 1 811 500 - 543 750
Cost / Gross Carrying Amount [𝐶4(𝑖)] 600 000 2 000 000 - 750 000
Accumulated Depreciation [𝐶2(𝑖) & 𝐶4(𝑖𝑖)] - (188 500) - (206 250)
Revaluation (𝐶1) 50 000 - - -
Additions at cost [𝐶3(𝑖)] - - 850 750 -
Depreciation [𝐶2(𝑖𝑖), 𝐶3(𝑖𝑖) & 𝐶4(𝑖𝑖𝑖)] - (51 103) (173 938) (148 875)
Disposals during year [𝐶4(𝑖𝑣)] - - - (243 000)
Carrying amount at end of year 650 000 1 760 397 676 812 151 875
Cost / Gross Carrying Amount 650 000 2 000 000 850 750 375 000
Accumulated Depreciation [𝐶4(𝑣)] - (239 603) (173 938) (223 125)
Land was revalued on 31 March 2020 by an independent sworn appraiser.
The carrying amount of the land if it was carried at cost would have amounted to
R500 000.
Calculations
C1. Land
Revaluation = (650 000 − 600 000)
= 𝑹𝟓𝟎 𝟎𝟎𝟎
C2. Buildings
(2 000 000−550 000) 39
i. Accumulated Depreciation – beginning of year =[ ∗ ]
25 12
= 𝑹𝟏𝟖𝟖 𝟓𝟎𝟎
12
ii. Depreciation for the year = [(1 811 500 − 700 000) ∗ ]
261
= 𝑹𝟓𝟏 𝟏𝟎𝟑
, C3. Equipment
i. Cost
R
Purchase price 805 000
Trade discount received (25 000)
Costs of testing whether the equipment is functioning properly 15 750
Professional fees of software engineer 55 000
Cost of equipment 850 750
(850 750 – 155 000)
ii. Depreciation for the year =[ ]
4
= 𝑹𝟏𝟕𝟑 𝟗𝟑𝟖
C4. Vehicles
i. Cost = (375 000 ∗ 2)
= 𝑹𝟕𝟓𝟎 𝟎𝟎𝟎
ii. Accumulated Depreciation at beginning of year
R
25 000 93 750
Vehicle A (100 000 ∗ 375 000)
30 000
Vehicle B (100 000 ∗ 375 000) 112 500
206 250
iii. Depreciation for the year
R
10 200 38 250
Vehicle A (100 000 ∗ 375 000)
(15 000 + 14 500)
Vehicle B [ ∗ 375 000) 110 625
100 000
148 875
iv. Disposals during year = (375 000 − 93 750 − 38 250)
= 𝑹𝟐𝟒𝟑 𝟎𝟎𝟎
v. Accumulated depreciation at end of year = (112 500 + 110 625)
= 𝑹𝟐𝟐𝟑 𝟏𝟐𝟓
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