QUESTION 4 Green Ltd is a manufacturing company and is manufacturing rugby balls for Bok Ltd....

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QUESTION 4 Green Ltd is a manufacturing company and is manufacturing rugby balls for Bok Ltd. Green Ltd uses machine Super 00, purchased on 1 January 20.1 for R1 million, for the manufacturing of the rugby balls. Machine Super 00 comprises of three components. Details of the components are as follows: Component Super 1 Super 2 Super 3 Total Cost Useful life Residual value Rand Years Rand 1 500 000 5 40 000 300 000 4 None 200 000 2 None 1 000 000 The components can function independently, but are used as a unit. Components are independently replaced at the end of their useful life. On 30 September 20.2, part 22 of component Super 2 broke down unexpectedly. The part was replaced at a cost of R110 000. Management estimated that the original cost of part 22 was R100 000. On 31 December 20.2, at the end of its useful life, component Super 3 was replaced at a cost of R210 000. Costs of day-to-day servicing of the machine amounted to R45 000 during 20.2 (20.1: R42 000). During 20.2 the useful life and residual value of the components were reassessed and they were considered not to have changed. Required Prepare the journal entries necessary to account for all aspects of property, plant and equipment for the years ended 31 December 20.1 and 20.2. (Journal entries must be provided for each component.) Your solution must comply with the requirements of International Financial Reporting Standards (IFRS). QUESTION 4 Green Ltd is a manufacturing company and is manufacturing rugby balls for Bok Ltd. Green Ltd uses machine Super 00, purchased on 1 January 20.1 for R1 million, for the manufacturing of the rugby balls. Machine Super 00 comprises of three components. Details of the components are as follows: Component Super 1 Super 2 Super 3 Total Cost Useful life Residual value Rand Years Rand 1 500 000 5 40 000 300 000 4 None 200 000 2 None 1 000 000 The components can function independently, but are used as a unit. Components are independently replaced at the end of their useful life. On 30 September 20.2, part 22 of component Super 2 broke down unexpectedly. The part was replaced at a cost of R110 000. Management estimated that the original cost of part 22 was R100 000. On 31 December 20.2, at the end of its useful life, component Super 3 was replaced at a cost of R210 000. Costs of day-to-day servicing of the machine amounted to R45 000 during 20.2 (20.1: R42 000). During 20.2 the useful life and residual value of the components were reassessed and they were considered not to have changed. Required Prepare the journal entries necessary to account for all aspects of property, plant and equipment for the years ended 31 December 20.1 and 20.2. (Journal entries must be provided for each component.) Your solution must comply with the requirements of International Financial Reporting Standards (IFRS).

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To prepare the journal entries for the property plant and equipment of Green Ltd we need to account for the acquisition replacement and servicing cost... View the full answer