The accountant of Richfield Pty Ltd did not provide for the depreciation on non-current assets in...

 

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The accountant of Richfield Pty Ltd did not provide for the depreciation on non-current assets in the current financial year. He approached you to assist her in calculating the depreciation and with the disclosure of property, plant and equipment in the financial statements for the year ended 30 June 2018. The following balances were extracted from the records of Richfield Pty Ltd on 30 June 2018 Machinery at cost R660 000 Accumulated depreciation on machinery R131 250 Vehicles at cost R360 000 Accumulated depreciation on vehicles R21 600 Equipment at cost R480 000 Accumulated depreciation on equipment R70 000 Additional information 1. A manufacturing machine was purchased on 31 July 2016 at a cost of R660 000. The estimated production capacity of the machine is 180 000 units over the useful life of the machine. The estimated residual value at the end of its useful life is R30 000. During the financial year, 42 000 units (2017: 37 500 units) were manufactured by the machine. 2. Depreciation on vehicles is provided at 30% per annum on the carrying amount method. A new vehicle with a cost of R216 000 was purchased on 31 August 2017 and correctly recorded. The other vehicles were purchased on 1 January 2017. 3. Equipment with an estimated economic useful life of six years was depreciated using straight-line method. New equipment with a cost of R120 000 was purchased on 1 April 2018 and is included in the balance on 30 June 2018. The other equipment was purchased on 1 May 2016. REQUIRED: Disclose property, plant and equipment on the statement of financial position and in the notes to the financial statements of Richfield Pty Ltd on 30 June 2018. The accountant of Richfield Pty Ltd did not provide for the depreciation on non-current assets in the current financial year. He approached you to assist her in calculating the depreciation and with the disclosure of property, plant and equipment in the financial statements for the year ended 30 June 2018. The following balances were extracted from the records of Richfield Pty Ltd on 30 June 2018 Machinery at cost R660 000 Accumulated depreciation on machinery R131 250 Vehicles at cost R360 000 Accumulated depreciation on vehicles R21 600 Equipment at cost R480 000 Accumulated depreciation on equipment R70 000 Additional information 1. A manufacturing machine was purchased on 31 July 2016 at a cost of R660 000. The estimated production capacity of the machine is 180 000 units over the useful life of the machine. The estimated residual value at the end of its useful life is R30 000. During the financial year, 42 000 units (2017: 37 500 units) were manufactured by the machine. 2. Depreciation on vehicles is provided at 30% per annum on the carrying amount method. A new vehicle with a cost of R216 000 was purchased on 31 August 2017 and correctly recorded. The other vehicles were purchased on 1 January 2017. 3. Equipment with an estimated economic useful life of six years was depreciated using straight-line method. New equipment with a cost of R120 000 was purchased on 1 April 2018 and is included in the balance on 30 June 2018. The other equipment was purchased on 1 May 2016. REQUIRED: Disclose property, plant and equipment on the statement of financial position and in the notes to the financial statements of Richfield Pty Ltd on 30 June 2018.

Answer rating: 100% (QA)

Property plant and equipment PPE are stated at their carrying amounts as at 30 June 2018 Carrying am... View the full answer