FAC2601 - Financial Accounting For Companies Assessment 2_6 April 2022

FAC2601 - Financial Accounting For Companies Assessment 2_6 April 2022. ASSIGNMENT 02 (30 marks) (36 minutes) The following balances were extracted from the trial balance of Bell Crest Ltd on 30 June 2020: Additional information R Land at cost 1, 2 800 000 Buildings at cost 1, Plant and machinery at carrying amount (1 July 2019) Furniture and equipment at cost 2, 3, 5 4, 5 2 100 000 600 000 - Accumulated depreciation on furniture and equipment (1 July 2019) 4, 5 (120 000) Additional information: 1. Bell Crest Ltd owns property in Germiston, situated on stand 50, 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. All of the net replacement values and fair values were determined by Mr Blog an independent sworn appraiser. Mr Blog had recent experience in the location and category of the property being valued. The values were determined with reference to net current market prices on an arm’s length basis of similar properties in similar areas. 2. On 1 September 2019, additional land was purchased at a cost of R700 000 in Germiston on stand 55, 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 Plant and machinery with a carrying amount of R1 000 000 at the beginning of the current financial year was withdrawn completely from use on 1 September 2019 after health inspectors prohibited the use of the plant due to irreparable pollution problems it may cause.