QUESTION $1(25$ marks$)$

John is the owner of a local gardening service company called Green Gardens $($Pty$)$ Ltd

$($Green Gardens$).$ Green Gardens has a $30$ June financial year$-$end.

You have been presented with the pre$-$adjustment trial balance of Green Gardens $($Pty$)$

Ltd as at $30$ June $2024$:

Account Note

Debit

$($R$)$

Credit

$($R$)$

Lawnmowers $$ cost $(1$ July $2023)1,23500$

Lawnmowers$-$ accumulated depreciation $(1$ July $2023)1,23000$

Vehicles $-$ cost $(1$ July $2023)3450000$

Vehicles $-$ accumulated depreciation $(1$ July $2023)3?$

$?=$ To be calculated.

During the year ended $30$ June $2024,$ the following transactions took place that

have not yet been accounted for:

Note $1$: New lawnmowers:

$1$ February $2024$: Green Gardens placed an order for $3$ new lawnmowers from Breez

Ltd$,$ a foreign supplier situated in Germany. The price of the new lawnmowers was

R$5000$ each.

$15$ February $2024$: The lawnmowers were shipped free on board $($FOB$)$ shipping point

and Green Gardens paid the outstanding balance to Breez Ltd on the same day.

$1$ March $2024$: The shipment arrived at the Durban harbour.

ANNEXURE F: FORMATIVE ASSESSMENT $1$

$57$ HFAC$132-1-$Jul$-$Dec$2024-$FA$1-$EDK$-$V$4-20240829$

$1$ March $2024$: An additional R$500$ was paid in cash for the delivery of the new

lawnmowers to Green Gardens$$ premises.

$1$ March $2024$: The lawnmowers came in $2$ parts, namely the engine and the body.

Green Gardens needed to hire a technician to assemble the parts of the lawnmowers.

The technician charged Green Gardens total of R$600$ for all three of the lawnmowers$$

assembly. With this technician, Green Gardens has an arrangement to pay all invoices

at the end of each month. On $1$ March $2024,$ the new lawnmowers were ready for use.

Note $2$: Old lawnmower:

On $1$ May $2024,$ Green Gardens sold their old lawnmower at a loss of R$600.$ This original

lawnmower was purchased on $1$ July $2019$ when the business was started.

Note $3$: Vehicles:

Green Gardens owns one vehicle that they bought when they started the business on $1$

July $2019.$

$31$ July $2023$: Green Gardens serviced the vehicle at a cost of R$2000.$

$30$ June $2024$: Green Gardens sold the vehicle for R$250000.$ On this day, the company

also bought a new vehicle for R$500000.$ The new vehicle has a useful life of $7$ years

with a residual value of R$150000.$

Old vehicle New vehicle

Date of purchase $1$ July $201930$ June $2024$

Purchase price R$450000$ R$500000$

Useful life $6$ years $7$ years

Residual value R$200000$ R$150000$

Depreciation method Straight line Straight line

Note $4$: Land:

On $31$ October $2023,$ Green Gardens purchased a piece of land for R$800000,$ with the

intention of building an office.

ANNEXURE F: FORMATIVE ASSESSMENT $1$

$58$ HFAC$132-1-$Jul$-$Dec$2024-$FA$1-$EDK$-$V$4-20240829$

Additional information:

$$ All lawnmowers, old and new, have a useful life of $5$ years, with no residual value

and are depreciated on the straight$-$line method.

$$ Green Gardens pays cash for all transactions unless otherwise stated.

REQUIRED:

$1\mathrm{.}1$ With reference to Note $1$: New lawnmowers, calculate the cost price of the new

lawnmowers. $(3$ marks$)$

$1\mathrm{.}2$ With reference to Note $3$: Vehicles, calculate the profit or loss on the sale of the

vehicle for the year ended $30$ June $2024.$

$$ Show all workings and reference accordingly.

$$ Round off to the nearest Rand.

$(6$ marks$)$

$1\mathrm{.}3$ Prepare the general ledger account for Accumulated depreciation $-$ Lawnmowers

for the financial year ended $30$ June $2024$ of Green Gardens $($Pty$)$ Ltd$.$

$$ Close off the account at the financial year$-$end.

$$ Ignore dates.

$$ Show all workings, and reference accordingly.

$$ Ignore VAT.

$$ Round off to the nearest Rand.

$(10$ marks$)$

$1\mathrm{.}4$ Prepare an extract of the Statement of Financial Position of Green Gardens $($Pty$)$

Ltd as at $30$ June $2024,$ showing only the non$-$current assets.

$$ Totals are not required.

$$ Notes to the financial statement are not required.

$(6$ marks$)$