ANNEXURE F: FORMATIVE ASSESSMENT 1 (35 marks) Aladdin's Carpets (Pty) Ltd is a company that manufactures...

  

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ANNEXURE F: FORMATIVE ASSESSMENT 1 (35 marks) Aladdin's Carpets (Pty) Ltd is a company that manufactures carpets and home décor related products such as curtains and blankets. The company uses various industrial machinery required to manufacture the products. 59 QUESTION 1 The following balances existed in the Statement of Financial Position at 30 June 2021: Machinery 2 750 000 Accumulated depreciation: Machinery 1 430 000 The following transactions relating to Machinery occurred during the financial year ended June 2022: 15.000 x -O RIS 30 = R18 92 1)* A new machine (Machine A) was purchased from an overseas supplier and paid for on 1 January 2022. The machine was purchased FOB destination point for 13 000) USD. The destination point was Aladdin's Carpets (Pty) Ltd's city's seaport. The machinery arrived at Aladdin's Carpets (Pty) Ltd's city's seaport on 15 January 2022. Transportation costs relating to the delivery of this new machinery from the seaport to Aladdin's Carpets (Pty) Ltd's premises cost R9 000 and were paid in cash Lp Not USD in on the same day (15 January) after it arrived at their premises. The following were exchange rates existed on the various dates: cash Exchange rate 1 January 2022 15 January 2022 Rand: USD 15.30: 1 15.25: 1 2) Machine A was installed in a workstation at Aladdin's Carpets (Pty) Ltd's factory on 1 February 2022 at a cost of R8 100 in cash after which it became available to use for making rugs. → R 207 900+ R8100 = R210000 3) On 31 March 2022, existing outdated machinery (Machine B) was sold for R40 000. The machinery was originally purchased on 1 January 2018 at a cost of R74 000. 216000* 10%x2=R54 000 210 000 + 107. * 7/2-R 360 R189 +R900 =R207 . On 1 May 2022, management decided that in order to be more profitable, the ma- chinery purchased on 1 January 2022 i.e. Machine A would be used to create only HFAC132-1-July-Dec2022-FA1-SK-V2-29062022 ANNEXURE F: FORMATIVE ASSESSMENT 1 tufted design carpets which have a higher selling price. In order to give carpets a tufted look, Machine A had to be modified by adding an additional part to the existing machinery. This existing part was locally purchased for R45 000 in cash on 1 May 2022 and attached to the machinery. The modified parts are expected to have the same useful life as the remaining useful life of the machinery. 5). There were no other additions or disposals of machinery during the financial year. () Machinery (Machine C) with a carrying value of R223 000 at the end of the financial year (after all depreciation was taken into account for the financial year) was con- sidered to be redundant and can only be used to make cheap, unpopular products. The value in use of this specific machinery was R198 000 and the fair value less cost to sell of the machinery is R201 500. 7. Additional information: o All Machines are depreciated at 10% p.a. on a straight-line basis. o All machines are considered to have a residual value of zero Rand. o Management has elected to account for all machines at the cost model. REQUIRED: Prepare the following General Ledger Accounts of Aladdin's Carpets (Pty) Ltd for the financial year ended 30 June 2022. Include all dates and close off the accounts at the end of the financial year. VAT may be ignored. Clearly show all workings. • Machinery and • Accumulated depreciation: Machinery 1.1 (31 marks) 1.2 Prepare the General Journal entry required at the end of the financial year to account for the redundant machinery (Machine C). Dates and narrations are not required. (4 marks) ANNEXURE F: FORMATIVE ASSESSMENT 1 (35 marks) Aladdin's Carpets (Pty) Ltd is a company that manufactures carpets and home décor related products such as curtains and blankets. The company uses various industrial machinery required to manufacture the products. 59 QUESTION 1 The following balances existed in the Statement of Financial Position at 30 June 2021: Machinery 2 750 000 Accumulated depreciation: Machinery 1 430 000 The following transactions relating to Machinery occurred during the financial year ended June 2022: 15.000 x -O RIS 30 = R18 92 1)* A new machine (Machine A) was purchased from an overseas supplier and paid for on 1 January 2022. The machine was purchased FOB destination point for 13 000) USD. The destination point was Aladdin's Carpets (Pty) Ltd's city's seaport. The machinery arrived at Aladdin's Carpets (Pty) Ltd's city's seaport on 15 January 2022. Transportation costs relating to the delivery of this new machinery from the seaport to Aladdin's Carpets (Pty) Ltd's premises cost R9 000 and were paid in cash Lp Not USD in on the same day (15 January) after it arrived at their premises. The following were exchange rates existed on the various dates: cash Exchange rate 1 January 2022 15 January 2022 Rand: USD 15.30: 1 15.25: 1 2) Machine A was installed in a workstation at Aladdin's Carpets (Pty) Ltd's factory on 1 February 2022 at a cost of R8 100 in cash after which it became available to use for making rugs. → R 207 900+ R8100 = R210000 3) On 31 March 2022, existing outdated machinery (Machine B) was sold for R40 000. The machinery was originally purchased on 1 January 2018 at a cost of R74 000. 216000* 10%x2=R54 000 210 000 + 107. * 7/2-R 360 R189 +R900 =R207 . On 1 May 2022, management decided that in order to be more profitable, the ma- chinery purchased on 1 January 2022 i.e. Machine A would be used to create only HFAC132-1-July-Dec2022-FA1-SK-V2-29062022 ANNEXURE F: FORMATIVE ASSESSMENT 1 tufted design carpets which have a higher selling price. In order to give carpets a tufted look, Machine A had to be modified by adding an additional part to the existing machinery. This existing part was locally purchased for R45 000 in cash on 1 May 2022 and attached to the machinery. The modified parts are expected to have the same useful life as the remaining useful life of the machinery. 5). There were no other additions or disposals of machinery during the financial year. () Machinery (Machine C) with a carrying value of R223 000 at the end of the financial year (after all depreciation was taken into account for the financial year) was con- sidered to be redundant and can only be used to make cheap, unpopular products. The value in use of this specific machinery was R198 000 and the fair value less cost to sell of the machinery is R201 500. 7. Additional information: o All Machines are depreciated at 10% p.a. on a straight-line basis. o All machines are considered to have a residual value of zero Rand. o Management has elected to account for all machines at the cost model. REQUIRED: Prepare the following General Ledger Accounts of Aladdin's Carpets (Pty) Ltd for the financial year ended 30 June 2022. Include all dates and close off the accounts at the end of the financial year. VAT may be ignored. Clearly show all workings. • Machinery and • Accumulated depreciation: Machinery 1.1 (31 marks) 1.2 Prepare the General Journal entry required at the end of the financial year to account for the redundant machinery (Machine C). Dates and narrations are not required. (4 marks)

Answer rating: 100% (QA)

1 Machinery Account for the year ended 30062022 Amount Date 310... View the full answer