The following balances for 29 February 2020 were taken from the books of Harry ltd. company that manufactures toys:

 

Additional information:

1. The patents were obtained on 1 March 2013 at R45 000, R4 500 is written off against profit annually.

2. Machinery and equipment were obtained on 1 June 2018. Depreciation is provided for at, 20% per annum on the reducing balance method.

3. Depreciation on vehicles is provided for at 20% per annum on the straight line method. The vehicles were obtained on 1 September 2017.

4. Hanger Ltd policy is to revalue land and buildings every three years at market value with reference to observable prices in an active market, by an independent sworn appraiser. The following information was obtained from the asset register:

Cost of Erf 11, Johannesburg 2013 ................................ 240 000 

Revalued on 1 February 2017 .......................................... 40 000 

Revalued on 1 February 2020 .......................................... 70 000

                                                                                               350 000

Transcribed Image Text:

Notes 18 000 2 136 000 3 Patents at carrying amount-29/2/2020 Machinery and equipment at carrying amount-29/2/2020 Vehicles at carrying amount-29/2/2020 Land and buildings at valuation Revaluation reserve 30 000 280 000 4. 4 40 000 250 000 44 000 165 000 91 000 24 000 26 000 12 000 1 000 135 000 7 000 5. Share capital-Ordinary shares Retained earnings - 1/3/2019 Profit for the year Accounts receivable Inventories: Raw materials 6. 7 Work in progress (toys) Finished toys Stationery 8 Accounts Payable Bank and cash on hand 10 79 000 Investments 70 000 12% mortgage over land and buildings (redeemable in 2025) Notes 18 000 2 136 000 3 Patents at carrying amount-29/2/2020 Machinery and equipment at carrying amount-29/2/2020 Vehicles at carrying amount-29/2/2020 Land and buildings at valuation Revaluation reserve 30 000 280 000 4. 4 40 000 250 000 44 000 165 000 91 000 24 000 26 000 12 000 1 000 135 000 7 000 5. Share capital-Ordinary shares Retained earnings - 1/3/2019 Profit for the year Accounts receivable Inventories: Raw materials 6. 7 Work in progress (toys) Finished toys Stationery 8 Accounts Payable Bank and cash on hand 10 79 000 Investments 70 000 12% mortgage over land and buildings (redeemable in 2025) Notes 18 000 2 136 000 3 Patents at carrying amount-29/2/2020 Machinery and equipment at carrying amount-29/2/2020 Vehicles at carrying amount-29/2/2020 Land and buildings at valuation Revaluation reserve 30 000 280 000 4. 4 40 000 250 000 44 000 165 000 91 000 24 000 26 000 12 000 1 000 135 000 7 000 5. Share capital-Ordinary shares Retained earnings - 1/3/2019 Profit for the year Accounts receivable Inventories: Raw materials 6. 7 Work in progress (toys) Finished toys Stationery 8 Accounts Payable Bank and cash on hand 10 79 000 Investments 70 000 12% mortgage over land and buildings (redeemable in 2025) Notes 18 000 2 136 000 3 Patents at carrying amount-29/2/2020 Machinery and equipment at carrying amount-29/2/2020 Vehicles at carrying amount-29/2/2020 Land and buildings at valuation Revaluation reserve 30 000 280 000 4. 4 40 000 250 000 44 000 165 000 91 000 24 000 26 000 12 000 1 000 135 000 7 000 5. Share capital-Ordinary shares Retained earnings - 1/3/2019 Profit for the year Accounts receivable Inventories: Raw materials 6. 7 Work in progress (toys) Finished toys Stationery 8 Accounts Payable Bank and cash on hand 10 79 000 Investments 70 000 12% mortgage over land and buildings (redeemable in 2025)

Answer rating: 100% (QA)

As it is visible write off for period March 2019 to Feb 2020 is pending and therefore we see value o... View the full answer