Question

BAULU 3. During the year R72 000 and R48 000 were paid as salaries to Singh and Song respectively. These amounts were credited to the bank account but incorrectly debited to the debtors' control account. Required: Prepare a statement of changes in equity for the year ended 28 February 2019 of Best Deals that is appropriate to the business of the partnership. You may omit the total column of this statement. Comparative figures and notes to the statement are not required. Show all workings.

QUESTION THREE [20]
The following information relating to property plant and equipment was extracted from
the accounting records of Sandile’s Supermarket:

1. Balances at 28 February 2018:
- Equipment at cost R 56 000
- Accumulated depreciation: equipment R 10 860
- 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 2018 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 2018. 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 2018.

2.2 On 28 February 2019 Sandile’s Supermarket sold a used printer for R14 400
cash. The accumulated depreciation on this printer amounted to R3 280 at 1
March 2018. The cost price of the printer 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 straight line method

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 Sandile’s Supermarket for the year ended 28 February 2019.

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.

Answer 1

Answer:

                                  Property plant and equipment note

	Rs.	Rs.	Rs.
1. Equipment
Original Cost		56,000
less: Accumulated depreciation as on 01 March 2018		-10,860
Written down value as on 01 March 2018		45,140
less: Value of printer sold on 28 February 2019
Cost of the printer	18,000
less: accumulated depreciation                                                                                                     as on 01-03-2018	-3,280
Written down value as on 01 March 2018	14,720
less: Depreciation for whole year @10% of written down value (14,720 x 10%)	-1,472	-13,248
Written down value of the equipment after the sale of equipment		31,892
less: Depreciation for whole year @10% of written down value (31892x10%) (rounded off)		-3,189
Written down value of the equipment as on 28 February 2019			28,703
2. Vehicles
Original Cost		560,000
less: Accumulated depreciation as on 01-03-2018		-285,860
Written down value as on 01-03-2018		274,140
less: Value of vehicle sold out on 31 August 2018
Cost of the Vehicle	240,000
less: accumulated depreciation                                                                                                     as on 01 March 2018	-120,100
Written down value as on 01-03-2018	119,900
less: Depreciation for 6 months @20% on original cost of vehicle ( 240,000 x 20% x 6/12)	-24,000	-95,900
Written down value of the equipment after the sale of equipment		178,740
Add: purchase of vehicle on 1 September 2018		440,000
		618,740
less: Depreciation ( Working note 1)		-108,000
Written down value of the vehicles as on 28 February 2019			510,740
			539,443

Working note 1: Depreciation on vehicles

Original cost of remaining vehicles after the sale of vehicle on 31 August 2018 =

= Total original cost of all the vehicles (less) Original cost of vehicle sold

= Rs. 560000 - Rs. 240,000 = Rs. 320,000

Calculation of depreciation on vehicles @20% per annum on straight line basis

Depreciation on old vehicles (for whole year) = Rs. 320000 x 20% = Rs. 64,000

Depreciation on new vehicle (for six months) = Rs. 440,000 x 20% x 6 months / 12 months

                                                                = Rs. 44,000

Total depreciation = Rs. 64,000 + Rs. 44,000

                          = Rs. 108,000