Prepare the property, plant and equipment note to be attached to the financial statements for Fred’s Transport for the year ended 28 February 2022. Show the cost, accumulated depreciation and the carrying amount of the disposed assets in the property, plant and equipment note. You may omit the total column. Show all workings. Round off all calculations to the nearest whole number.
QUESTION TWO
The following information relating to property plant and equipment was extracted from
the accounting records of Fred’s Transport for year ended 28 February 2022;
1. Balances at 28 February 2021:
- Equipment at cost R 56 000
-
- Vehicles at cost R560 000
- Accumulated depreciation: vehicles R285 360
2. The following transactions in respect of property, plant and equipment took place
during the current financial year:
2.1 An old vehicle was sold on 31 August 2021 for R144 000 cash. The cost price
of the vehicle sold was R240 000, and its accumulated depreciation amounted
to R120 100 on 1 March 2021. The proceeds from the sale of the vehicle was
used to partially finance the purchase of another vehicle for R440 000 bought
on 1 September 2021.
2.2 On 28 February 2022 sold used equipment for R14 400 cash. The accumulated
depreciation on this equipment was R3 280 at 1 March 2021. The cost price of
the equipment was R18 000.
3. Depreciation must still be provided for as follows:
• Equipment at 10% per year on the diminishing balance method, and
• Vehicles at 20% per year on the
4. The financial year ends on the last day of February.
Required:
Prepare the property, plant and equipment note to be attached to the financial
statements for Fred’s Transport for the year ended 28 February 2022.
Show the cost, accumulated depreciation and the carrying amount of the disposed
assets in the property, plant and equipment note. You may omit the total column.
Show all workings. Round off all calculations to the nearest whole number.
Step by step
Solved in 2 steps
