Lungile Sithole operates Lungi's general dealers in the rural area of Mtwalume. The following information was...

 

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Lungile Sithole operates Lungi's general dealers in the rural area of Mtwalume. The following information was extracted from the pre-adjustment trial balance as at 28 February 2020 (unless stated otherwise): Balances at 28 February 2020: Debit - R Credit -R Equipment at cost 800 000 Accumulated depreciation: Equipment (1 March 2019) 40 000 Vehicles at cost: 400 000 Accumulated depreciation: Vehicles (1 March 2019) 110 000 10% Fixed deposit 75 000 Inventories - trade goods (1 March 2019) 86 300 - Consumables (1 March 2019) 9 290 Trade receivables Bank 42 700 68 300 Additional information: 1. Depreciation must still be provided for as follows: Equipment at 10% per year on the Diminishing balance method, Vehicles at 20% per year on the Fixed instalment method. 2. Transactions that took place in respect of property, plant and equipment for the current financial year: > Equipment: All the equipment in use was bought on 31 August 2018. Some of the equipment was sold for R179 000 on 31 August 2019. The cost price of the equipment sold was R200 000. - Vehicles: Lungi's general dealers owned two vehicles at 28 February 2020. The original vehicle was bought on 1 March 2017. An additional vehicle was bought on 1 September 2019 for R125 00. 3. Credit losses of R1 000 must be written-off. On 28 February 2020 physical stock was taken of the inventories on the 4. premises and were valued as follows: > Trading inventory R93 700, and - Consumables R11 800. 5. Interest of 10% per year must still be provided on the fixed deposit of R75 000 which was invested on 2 January 2019 for a period of 4 years. Required: a. Prepare the property, plant and equipment note in the financial statements of or Lungi's General Dealers for the year ended 28 February 2020. You may omit the "Total" column of the property, plant and equipment. (15) b. Prepare the asset section of the statement of financial position for Lungi's General Dealers as at 28 February 2020. (10) Your answer must comply with the requirements of International Financial Reporting Standards (IFRS) appropriate to the business of Lungi's General Dealers. Show all workings. Where applicable, round off all amounts to the nearest rand. Lungile Sithole operates Lungi's general dealers in the rural area of Mtwalume. The following information was extracted from the pre-adjustment trial balance as at 28 February 2020 (unless stated otherwise): Balances at 28 February 2020: Debit - R Credit -R Equipment at cost 800 000 Accumulated depreciation: Equipment (1 March 2019) 40 000 Vehicles at cost: 400 000 Accumulated depreciation: Vehicles (1 March 2019) 110 000 10% Fixed deposit 75 000 Inventories - trade goods (1 March 2019) 86 300 - Consumables (1 March 2019) 9 290 Trade receivables Bank 42 700 68 300 Additional information: 1. Depreciation must still be provided for as follows: Equipment at 10% per year on the Diminishing balance method, Vehicles at 20% per year on the Fixed instalment method. 2. Transactions that took place in respect of property, plant and equipment for the current financial year: > Equipment: All the equipment in use was bought on 31 August 2018. Some of the equipment was sold for R179 000 on 31 August 2019. The cost price of the equipment sold was R200 000. - Vehicles: Lungi's general dealers owned two vehicles at 28 February 2020. The original vehicle was bought on 1 March 2017. An additional vehicle was bought on 1 September 2019 for R125 00. 3. Credit losses of R1 000 must be written-off. On 28 February 2020 physical stock was taken of the inventories on the 4. premises and were valued as follows: > Trading inventory R93 700, and - Consumables R11 800. 5. Interest of 10% per year must still be provided on the fixed deposit of R75 000 which was invested on 2 January 2019 for a period of 4 years. Required: a. Prepare the property, plant and equipment note in the financial statements of or Lungi's General Dealers for the year ended 28 February 2020. You may omit the "Total" column of the property, plant and equipment. (15) b. Prepare the asset section of the statement of financial position for Lungi's General Dealers as at 28 February 2020. (10) Your answer must comply with the requirements of International Financial Reporting Standards (IFRS) appropriate to the business of Lungi's General Dealers. Show all workings. Where applicable, round off all amounts to the nearest rand.

Answer rating: 100% (QA)

a Net Value of PPE 74540... View the full answer