Superbus Ltd is a company which specialises in the building of luxurious tour busses on order....

 

Transcribed Image Text:

Superbus Ltd is a company which specialises in the building of luxurious tour busses on order. At the beginning of the 20.22 financial year Superbus Ltd signed a contract to deliver two of these busses to Toerbus Ltd at N$ 2 000 000 per bus. Superbus Ltd estimates that it would take approximately 26 months to complete the contract. On 1 July 20.22 Superbus Ltd obtained a long-term facility of N$ 5 000 000 to finance this project. The facility bears market related interest at 12% per annum and is compounded quarterly in arrears. The amount of borrowing costs to be capitalised for the year ended 31 March 20.23 was calculated as N$ 52 046. The amount of work in progress for the busses under construction is calculated as N$ 1 312 046, for the year ended 31 March 20.23 Construction of plant On 1 November 20.22 Superbus commenced with the construction of a new plant (qualifying asset), which will take approximately 12 months to complete. Construction expenses were paid in cash on the following dates 30 November 20.22 31 December 20.22 31 January 20.23 28 February 20.23 N$ 20 000 35 000 25 000 40 000 Cockroach Ltd has a cheque account facility with an overdraft limit of N$ 500 000, at a market related interest rate of 18% per annum. On 1 January 20.23 a loan amounting to N$ 1 000 000 was raised to finance the remaining construction expenses. The amount of borrowing costs to be capitalised for the year ended 28 February 20.23 amounted to NS 16 672. Interest received on the surplus funds relating to the loan was NS 13 167 and the total finance costs on the loan amounted to NS 28 333 for the year ended 28 February 20.23 Required (a) Indicate how the applicable items would be disclosed in the notes to the statement of profi 4 or loss and other comprehensive income and in the inventory note for Superbus for the yea ending 31 March 20.23 b) Calculate the amounts at which the following items will be disclosed in the financial 6 statements for the year ended 28 February 20.23 ➤ Plant; > Interest received; Finance cost Superbus Ltd is a company which specialises in the building of luxurious tour busses on order. At the beginning of the 20.22 financial year Superbus Ltd signed a contract to deliver two of these busses to Toerbus Ltd at N$ 2 000 000 per bus. Superbus Ltd estimates that it would take approximately 26 months to complete the contract. On 1 July 20.22 Superbus Ltd obtained a long-term facility of N$ 5 000 000 to finance this project. The facility bears market related interest at 12% per annum and is compounded quarterly in arrears. The amount of borrowing costs to be capitalised for the year ended 31 March 20.23 was calculated as N$ 52 046. The amount of work in progress for the busses under construction is calculated as N$ 1 312 046, for the year ended 31 March 20.23 Construction of plant On 1 November 20.22 Superbus commenced with the construction of a new plant (qualifying asset), which will take approximately 12 months to complete. Construction expenses were paid in cash on the following dates 30 November 20.22 31 December 20.22 31 January 20.23 28 February 20.23 N$ 20 000 35 000 25 000 40 000 Cockroach Ltd has a cheque account facility with an overdraft limit of N$ 500 000, at a market related interest rate of 18% per annum. On 1 January 20.23 a loan amounting to N$ 1 000 000 was raised to finance the remaining construction expenses. The amount of borrowing costs to be capitalised for the year ended 28 February 20.23 amounted to NS 16 672. Interest received on the surplus funds relating to the loan was NS 13 167 and the total finance costs on the loan amounted to NS 28 333 for the year ended 28 February 20.23 Required (a) Indicate how the applicable items would be disclosed in the notes to the statement of profi 4 or loss and other comprehensive income and in the inventory note for Superbus for the yea ending 31 March 20.23 b) Calculate the amounts at which the following items will be disclosed in the financial 6 statements for the year ended 28 February 20.23 ➤ Plant; > Interest received; Finance cost

Answer rating: 100% (QA)

Disclosures in the Notes to Financial Statements Ending 31 March 2023 a In the notes to the statemen... View the full answer