Prepare the property, plant and equipment note

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Reference no: EM133136139

Question - The following balances were extracted from the trial balance of Bell Crest Ltd on 30 June 2020.

Land at Cost R 800,000

Buildings at Cost R1,200,000

Plant and machinery at carrying amount R2,100,000 (1 July 2019)

Furniture and equipment at Cost R600,000

Accumulated depreciation R (120,000) (furniture and equipment 1 July 2019)

Additional info:

1. Bell Crest Ltd owns property in Germiston that it occupies for its own business purposes. The land and buildings were acquired on 1 August 2016. The building is depreciated over 20 years. Mr Blog an experienced independent sworn appraiser determined that the fair value of the land obtained on 1 August 2016 to be R850 000 on 1 October 2019.

2. On 1 September 2019, additional land was purchased at the cost of R 700 000 in Germiston for use for its own business purposes. From 1 August 2019 Bell Crest Ltd withdrew some of its plant and machinery costing R500 000 to be used in the construction of the building. The building was completed and ready for use on 1 November 2019. The following expenses were incurred in the construction of the building.

Labour Costs R850,000

Material R425,000

The newly constructed building had an estimated useful life of 25 years.Plant and machinery with a carrying amount of R 1 000 000 at the beginning of the current financial year was withdrawn completely from use on 1 September 2019 after health inspectors prohibited the use of the plant due to irreparable pollution problems it may cause.

3. All plant and machinery was acquired 1 July 2017.

4. No transactions took place for furniture and equipment during the current financial year.

5. The following depreciation rates are applicable:

Plant and machinery at 25% per annum according to the reducing balance method.

Furniture and equipment at 10% per annum on the straight line method.

REQUIRED - Prepare the property, plant and equipment note to the financial statements of Bell Crest Ltd for the year ended 30 June 2020 in compliance with International Financial Reporting Standards (IFRS).

Reference no: EM133136139

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