Mukoya (Pty) Limited which has its headquarters at ERF 1985 Millenium Park, Rundu deals in stationery and
Question:
Mukoya (Pty) Limited which has its headquarters at ERF 1985 Millenium Park, Rundu deals in stationery and printing of textbooks. The following information relates to their property, plant, and equipment whose balances as of 31 December 2016 were:
ASSET | COST | ACCUMULATED DEPRECIATION |
land and building | 5 880 000 | 388 000 |
plant and equipment | 3 930 000 | 1 180 000 |
fixture and fittings | 1 200 000 | 420 000 |
Total | 11 010 000 | 1 988 000 |
The accounting policy in relation to depreciation is as follows:
Buildings – 2% straight-line basis;
Plant & equipment – 20% straight-line basis;
Fixtures & fittings – 10% straight-line basis.
The following additional information is relevant for the year ended 31 December 2017:
a) Transactions relating to buildings are as follows:
1. Buildings accounts for N$ 3 880 000 of the cost of land and buildings
2. On 1 January 2017 the land & buildings were revalued at N$ 8 400 000 (of which the
building accounts for N$ 6 900 000). They had originally been acquired on 1 January
2012.
b) Fixtures & fittings costing were acquired during the year as follows:
1. On 1 April 2017 for N$ 400 000, installation costs for these items were N$10 000 and maintenance costs were N$3 000.
2. On 30 June 2017 furniture for N$ 150 000 and transport cost amounting to N$ 25000 was acquired.
c) Plant and machinery transactions during the year were as follows:
1. Plant & machinery costing N$ 560 000 was purchased on 1 July 2017.
2. A machine purchased on 1 January 2013 for N$500 000 was sold on 1 July 2017 for N$ 240 000.
Required:
a) prepare an extract of the statement of financial position showing property, plant, and equipment to comply with the requirements of Companies Act 28 of 2004 and International Financial Reporting Standards (IFRS). Comparative figures are required.
b) prepare the note for Property, Plant, and Equipment showing the following:
(i) Basis of the presentation includes the reporting entity
(ii) Summary of significant accounting policy
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,