National Wild Resorts Ltd (hereafter NWR) is a leading resorts company that manages lodges, campgrounds and resorts
Fantastic news! We've Found the answer you've been seeking!
Question:
National Wild Resorts Ltd (hereafter “NWR”) is a leading resorts company that manages lodges, campgrounds and resorts throughout Namibia. The company has developed a corporate website to keep abreast of technological advancements and accommodate the trend of doing business online. NWR noted that most of its reservations are done online. The website enables it to advertise its lodges, and to make potential customers aware of any special promotions. As
Transcribed Image Text:
a result its website is divided into two distinct areas: one that deals with advertising and the other with sales. During 2018, the company developed the website at a cost of N$800 000 which was ready for use on 1 April 2019. The website met all the conditions fir capitalisation and had an estimate useful life of 4 years and a Nil residual value. This website was to be amortised over a total of 4 years to a nil residual value. At the beginning of the year 2021, it had a carrying amount of N$600 000 and a remaining useful life of 3 years. On 30 June 2020, NWR's website was hacked with the aim of creating fictitious reservations entitling the hackers to free accommodation. Unfortunately, the hackers were quite inexperienced and destroyed the website with a virus which rendered it worthless. The company immediately embarked on developing a completely new website on 01 July 2020. By 30 September 2020, the website had been completed. The following costs were incurred and paid for in full: Feasibility Study New Licence to operate the web Customer preference study Website Designing fees Upgrade fees: occurred On 31 December 2020 and due every 6 months Advertising (NS) Game drive fees Maintenance costs Operational costs Net cash inflows 17650 87 500 33 000 787 500 87 500 The new website was available for use on 01 October 2020 and it was estimated that it will need to be entirely re-designed after 5 years. You may assume that all relevant costs were incurred evenly throughout the period. The company has its year end on 31 March annually. PART B (15 marks) NWR purchased a specialized game tracking and viewing vehicle which would not only hold a larger number of passengers (with a seating capacity of 30 persons) but also have greater mileage capacity (i.e increased kilometre coverage). Only one of this type of vehicle was purchased to assess whether it actually meets NWR's needs. The vehicle was purchased on 1 July 2019 at a cost of N$1,000,000. The accounting policy for motor vehicles is to apply the cost model, and to depreciate such assets on a straight-line basis at a rate of 20% per year. On 31 March 2020 the vehicle was involved in an accident with a herd of elephants. Due to the specialised nature of the vehicle, they were unable to determine its fair value. They estimated that they would generate the following cash flows from the use of the asset in future: 2021 2022 2023 390,985 355,993 288,554 -20,385 -22,378 -28.375 -40.567 -43,058 -46,129) 330,033 290,557 214,050 Sales (NS) Present value factors for a discount rate of 10% are as follows: 33 000 87 500 26 250 875 000 87 500 a result its website is divided into two distinct areas: one that deals with advertising and the other with sales. During 2018, the company developed the website at a cost of N$800 000 which was ready for use on 1 April 2019. The website met all the conditions fir capitalisation and had an estimate useful life of 4 years and a Nil residual value. This website was to be amortised over a total of 4 years to a nil residual value. At the beginning of the year 2021, it had a carrying amount of N$600 000 and a remaining useful life of 3 years. On 30 June 2020, NWR's website was hacked with the aim of creating fictitious reservations entitling the hackers to free accommodation. Unfortunately, the hackers were quite inexperienced and destroyed the website with a virus which rendered it worthless. The company immediately embarked on developing a completely new website on 01 July 2020. By 30 September 2020, the website had been completed. The following costs were incurred and paid for in full: Feasibility Study New Licence to operate the web Customer preference study Website Designing fees Upgrade fees: occurred On 31 December 2020 and due every 6 months Advertising (NS) Game drive fees Maintenance costs Operational costs Net cash inflows 17650 87 500 33 000 787 500 87 500 The new website was available for use on 01 October 2020 and it was estimated that it will need to be entirely re-designed after 5 years. You may assume that all relevant costs were incurred evenly throughout the period. The company has its year end on 31 March annually. PART B (15 marks) NWR purchased a specialized game tracking and viewing vehicle which would not only hold a larger number of passengers (with a seating capacity of 30 persons) but also have greater mileage capacity (i.e increased kilometre coverage). Only one of this type of vehicle was purchased to assess whether it actually meets NWR's needs. The vehicle was purchased on 1 July 2019 at a cost of N$1,000,000. The accounting policy for motor vehicles is to apply the cost model, and to depreciate such assets on a straight-line basis at a rate of 20% per year. On 31 March 2020 the vehicle was involved in an accident with a herd of elephants. Due to the specialised nature of the vehicle, they were unable to determine its fair value. They estimated that they would generate the following cash flows from the use of the asset in future: 2021 2022 2023 390,985 355,993 288,554 -20,385 -22,378 -28.375 -40.567 -43,058 -46,129) 330,033 290,557 214,050 Sales (NS) Present value factors for a discount rate of 10% are as follows: 33 000 87 500 26 250 875 000 87 500
Expert Answer:
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
C plc wants to reward its directors for their service to the company and has designed a bonus package with two different elements as follows. The directors are informed of the scheme and granted any...
-
C and D agree to form a partnership. C is to contribute $50,000 in assets and to devote one-half time to the partnership. D is to contribute $20,000 and to devote full time to the partnership. How...
-
Let c 1 = 3 + 4i, c 2 = 1 -2i, and c 3 = -1 + i. Compute each of the flowing and simplify as much as possible. (a) c 1 + c 2 (b) c 3 - c 1 (c) c 1 c 2 (d) c 2 c 3 (e) 4c 3 + c 2 (f) (-i) . c 2 (g) 3c...
-
While emptying a wheelbarrow, a gardener exerts on each handle AB a force P directed along line CD. Knowing that P must have a 30-lb horizontal component, determine (a) The magnitude of the force P,...
-
Bess, a widow, died in October 2015. Her gross estate, which totaled $7 million, included a $100,000 life insurance policy on her life that she gave away in 2013. The taxable gift that arose from...
-
The following table summarizes the annual returns you would have made on two companiesScientific Atlanta, a satellite and data equipment manufacturer, and AT&T, the telecomm giant, from 1988 to 1998....
-
Defendant Monty J. Person began working for Garage Solutions, LLC, in March 2015. Three months into his employment, Person was sent by the owner of Garage Solutions, Mark Fontenot, to Rexburg, Idaho,...
-
Melissa's Photo Studio offers both individual and group portrait options. The process flow diagram in Figure shows that all customers must first register and then pay at one of two cashiers. Then...
-
You have calculated the historical dollar weighted return, annual geometric average return and annual arithmetic average return. You always reinvest your dividends and interest earned on the...
-
Golden Wedding Dress Company designs custom wedding dresses for brides to be. The person preparing the adjusting entries at year-end was unable to complete the adjustments due to illness. You have...
-
Read accelerate!" to prepare for this work today's organizations must be able to change quickly as business operates in a mode of unusual and, sometimes, volatile operations. The view of rigid,...
-
General Products writes checks that average $28,000 daily. These checks take an average of 6 days to clear. It receives payments that average $30,000 daily. It takes 3 days before these checks are...
-
Orchard B&B is a bed and breakfast on the coast of Florida. As customers make reservations they are required to pay cash in advance equal to one-half of the rate for their stay. How should Orchard...
-
Suppose systems A and B each have 25 bins, and each bin can store one unit of energy. If a system has one unit of energy, its multiplicity is = 25 because the unit of energy can go into any of the 25...
-
write the best characterizes relevant information?
-
Yuri, a shareholder, owned 40% of Tempest's stock for 210 days and 30% of Tempest's stock for the remaining 155 days of the year (not a leap year). Using the required per-day allocation method,...
-
Current Attempt in Progress The following are the components in determining cost of goods sold. Determine the missing amounts. (a) (b) (c) $ Beginning Inventory $80,300 $54,200 $ Purchases $100,000 $...
-
Uniform electric field in Figure a uniform electric field is directed out of the page within a circular region of radius R = 3.00 cm. The magnitude of the electric field is given by E = (4.50 x 10-3...
-
Bleu plc acquired 80% of the common shares of Verte plc on 1 January 20X0 and gained control. At that date the statements of financial position of the two companies were as follows: Note: The fair...
-
The draft statement of financial position of Telin plc at 30 September 20X5 was as follows: Preference shares of the company were originally issued at a premium of 2p per share. The directors of the...
-
Beta Ltd had the following changes during 20X1: 1 January 1,000,000 shares of 50c each 31 March 500,000 shares of 50c each issued at full market price of $5 per share 30 April Bonus issue made of 1...
-
Michael is in his last year of undergraduate studies in human services and economics and is conducting original research for his final research project. As part of his project, he is required to keep...
-
Keza is studying online for a masters degree in Management and wishes to undertake her research project in her home country, Rwanda, where she works as a civil servant. Due to her high pressure job,...
-
You wish to study the reasons why car owners join manufacturer-sponsored owners clubs. You choose to use a qualitative methodology and narrative inquiry research strategy involving unstructured...
Study smarter with the SolutionInn App