QUESTION $3$

$(50$ MARKS$)$

$(75$ MINUTES$)$

SamApp Ltd manufactures smart televisions. The financial manager requires your assistance

to prepare the financial statements for the reporting period ended $31$ March $2022.$ The

following information is presented to you:

Due to the increase in demand for SamApp televisions, it was decided to construct an

additional manufacturing plant. In order to finance the plant. A loan of R$2000000$ with

BNF Bank was taken out on $1$ June $2019.$ Had it not been for the construction of the

plant the loan would not have been obtained. Construction activities began on the $1$

August $2019.$ The construction of the plant was completed on $1$ January $2022.$ The plant

was available for use on $1$ March $2022.$

The following expenditure relates to the manufacturing plant:

Finance costs on the loan for the following periods are as follows:

Depreciation for the manufacturing plant is calculated using the straight line method over

a period of $20$ years. The residual value of the plant amounts to R$150000.$

SamApp Ltd acquired a machine on $1$ April $2019.$ The machine is held under a lease

agreement for $5$ years and is expected to have a useful life of $6$ years. Ownership is not

expected to transfer to SamApp after the lease agreement. The effective interest rate is

$15\%.$ The following correctly prepared information is provided:

SamApp current delivery vehicle has become too small and management have decided

to sell the vehicle $1$ December $2021.$details regarding the delivery vehicle are as below