QUESTION $4$

$(25$ marks$)$

Walker $($Pty$)$ Ltd $("$Walker$")$ is a company that manufactures kitchen cupboards. Walker

has a $30$ June financial year$-$end.

The following transactions took place during the current financial year and have

not yet been recorded:

Note $1$: Land:

On $1$ January $2024,$ Walker received the valuation report from the bank, stating that the

land is worth R$9250000.$ The land was purchased on $1$ January $2022.$

Note $2$: Machinery:

Machinery consists of $1$ machine that is used to cut the material in the shape that is

required. This machine consists of $2$ components, namely mechanical and control. The

mechanical component contributes to $75\%$ of the total cost of the machinery and the

balance of $25\%$ of the total cost is attributable to the control component. The mechanical

component has a useful life of $10$ years, and the control component only has a useful

life of $5$ years and are depreciated on the straight$-$line method. The machine was

purchased and ready for use on the $1$st of January $2022.$

ANNEXURE F: FORMATIVE ASSESSMENT $1$

On the $1^{st}$ of May $2024$ the control component of the machine broke and needed to be

replaced. The component was relaced immediately at a cost of R$550000.$ The

component was ready for use on the $1^{st}$ of May $2024.$ Walker paid the supplier at the

end of the month as agreed. The new control component has a useful life of $6$ years and

is depreciated on the straight$-$line method.

Note $3$: Equipment:

Equipment consists of $20$ drills. All the drills have been purchased on the $1^{st}$ of January

All drills were available for use on the $1^{st}$ of January $2022.$ These drills have a

useful life of $5$ years and are depreciated on the straight$-$line method. On the ${31}^{st}$ of

November $2023,$ Walker had to service all the drills at a cost of R$32000.$ They paid the

service provider immediately in cash.

Additional information:

Walker is not a registered VAT vendor.

Land is accounted for on the revaluation model.

Exclude all income and deferred taxation implications.

REQUIRED:

$4\mathrm{.}1$ By referring to notes $1$ and $3,$ prepare the general journal entries to account for

transactions related to land and equipment in the accounting records of

Walker $($Pty$)$ Ltd for the year ended $30$ June $2024.$

Journal dates and narrations are not required.