Question

Annbul is a company in real estate sector. The balances of fixed asset accounts as at the beginning of the year and additions during the year were as follows:

	Cost or valuation 1 November 2000	Accumulated depreciation	Additions during the year
	Sh.'000'	Sh.'000'	Sh.'000
Freehold land and buildings	157,000	-	7,600
Leasehold land and buildings(Over 50 years)	121,800	-	3,800
Leasehold land and buildings(Under 50 years)	60,200	5,800	-
Furniture and equipment	150,800	52,200	1,800

1. The company does not provide for depreciation on freehold properties or properties held on lease with 50 years or more to run at the balance sheet date. Properties held on lease with less than 50 years to run are depreciated over the unexpired term. Items of equipment are depreciated over their estimated useful life.

2. Some of the leasehold property in the books costing Sh.7, 500,000 had just 50 years remaining on the lease in October 2018 and has not yet been transferred to the under 50 years category.
3. Disposals during the year included the following:

	Cost	Accumulated depreciation	Sale proceeds
	Sh.`000'	Sh.`000'	Sh.'000.'
Freehold land and buildings	3,600	-	4,800
Leasehold under 50 year	2,300	1,700	960

All the sale proceeds have been included in the revenue; no other adjustment has been made.

The determination of depreciation expense for the year included in the trial balance above has correctly been done for those properties not disposed of and included in the under 50 years category at the beginning of the year.

4. Freehold land was revalued on an existing use basis by a professional valuer but the Surplus of Sh.6,000.000 has not yet been brought into account.

Required:

1. A schedule showing property plant and equipment movements for the year ended 31 October 2019.

Answer 1

Schedule of Property Plant & Equipment for the year ended 31st October 2019.			Amount in Sh 000's
Particulars	Freehold Land & Buildings	Lease Hold land & Buildings	Furniture & Equipment	Total
		Over 50 Years	Under 50 Years
Gross Block
As on 1st Nov 2000	1,57,000	1,21,800	60,200	1,50,800	4,89,800
Additions during the Period from 1st Nov 2000 to 31st Oct 2019	7,600	3,800	-	1,800	13,200
Leasehold property to be transferred from Over 50 Years to Under 50 Years	-	-7,500	7,500	-	-
Revalued Freehold Land	6,000	-	-	-	6,000
Disposals	-3,600	-	-2,300	-	-5,900
As on 31st Oct 2019	1,67,000	1,18,100	65,400	1,52,600	5,03,100
Accumulated Depreciation
As on 31st Oct 2019	-	-	5,800	52,200	58,000
Disposals	-	-	-1,700	-	-1,700
Depreciation for Asset shifted from Over 50 Years to Under 50 Years	-	-	150	-	150
(7500/50)
Corrected Balance as on 31st Oct 2019	-	-	4,250	52,200	56,450
Net Block
As on 31st Oct 2019	1,67,000	1,18,100	61,150	1,00,400	4,46,650