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Parents Pricing Home NSC Accounting Note to the Balance Sheet and Asset disposal Calculate the missing amounts denoted by (a) to (e)
Calculate the missing amounts denoted by (a) to (e) - NSC Accounting - Question 3 - 2017 - Paper 1 Question 3
View full question Calculate the missing amounts denoted by (a) to (e).
(a) Calculate the carrying value of Land and Buildings on 1 March 2016.
(b) Calculate the total depreciation o... show full transcript
View marking scheme Worked Solution & Example Answer:Calculate the missing amounts denoted by (a) to (e) - NSC Accounting - Question 3 - 2017 - Paper 1
(a) Calculate the carrying value of Land and Buildings on 1 March 2016. Only available for registered users.
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To find the carrying value of Land and Buildings on 1 March 2016, we need to use the carrying value on 28 February 2017 and account for accumulated depreciation.
The formula is:
e x t C a r r y i n g V a l u e = e x t C a r r y i n g V a l u e ( 28 F e b 2017 ) + e x t A c c u m u l a t e d D e p r e c i a t i o n ext{Carrying Value} = ext{Carrying Value (28 Feb 2017)} + ext{Accumulated Depreciation} e x t C a rry in g Va l u e = e x t C a rry in g Va l u e ( 28 F e b 2017 ) + e x t A cc u m u l a t e d De p rec ia t i o n Plugging in the values:
2 , 550 , 000 = e x t C a r r y i n g V a l u e ( 1 M a r c h 2016 ) − 325 , 000 2,550,000 = ext{Carrying Value (1 March 2016)} - 325,000 2 , 550 , 000 = e x t C a rry in g Va l u e ( 1 M a rc h 2016 ) − 325 , 000 Thus:
e x t C a r r y i n g V a l u e ( 1 M a r c h 2016 ) = 2 , 550 , 000 + 325 , 000 = 2 , 875 , 000 ext{Carrying Value (1 March 2016)} = 2,550,000 + 325,000 = 2,875,000 e x t C a rry in g Va l u e ( 1 M a rc h 2016 ) = 2 , 550 , 000 + 325 , 000 = 2 , 875 , 000
(b) Calculate the total depreciation on vehicles on 28 February 2017. Only available for registered users.
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To calculate the total depreciation on vehicles, we need to differentiate between new and old vehicles:
New Vehicles (for the current period):
Cost : R422,550
Depreciation Rate : 10%
Calculating for one year:
ext{Depreciation} = 422,550 imes rac{10}{100} = 42,255
Old Vehicles (for the period up to 28 February 2017):
Carrying Value : R350,000
Depreciation:
ext{Depreciation} = 350,000 imes rac{20}{100} = 70,000
This amount can only be written off to the extent of R34,999.
Therefore, the total depreciation for vehicles is:
42 , 255 + 34 , 999 = 77 , 254 42,255 + 34,999 = 77,254 42 , 255 + 34 , 999 = 77 , 254
(c) Calculate the carrying value of Vehicles on 28 February 2017. Only available for registered users.
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To determine the carrying value of vehicles on 28 February 2017, we subtract the total depreciation calculated from the cost of the vehicles:
Total Cost of Vehicles : R772,550
Total Depreciation : R77,254
Thus, the carrying value is calculated as follows:
e x t C a r r y i n g V a l u e = e x t C o s t − e x t T o t a l D e p r e c i a t i o n ext{Carrying Value} = ext{Cost} - ext{Total Depreciation} e x t C a rry in g Va l u e = e x t C os t − e x t T o t a l De p rec ia t i o n Substituting the values:
e x t C a r r y i n g V a l u e = 772 , 550 − 77 , 254 = 695 , 296 ext{Carrying Value} = 772,550 - 77,254 = 695,296 e x t C a rry in g Va l u e = 772 , 550 − 77 , 254 = 695 , 296
(d) Calculate the carrying value of Equipment on 31 December 2016. Only available for registered users.
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To calculate the carrying value of Equipment, we will need the cost and the accumulated depreciation. Given:
Cost : R120,000Total Depreciation : R89,100
The carrying value formula is:
e x t C a r r y i n g V a l u e = e x t C o s t − e x t T o t a l D e p r e c i a t i o n ext{Carrying Value} = ext{Cost} - ext{Total Depreciation} e x t C a rry in g Va l u e = e x t C os t − e x t T o t a l De p rec ia t i o n Therefore:
e x t C a r r y i n g V a l u e = 120 , 000 − 89 , 100 = 30 , 900 ext{Carrying Value} = 120,000 - 89,100 = 30,900 e x t C a rry in g Va l u e = 120 , 000 − 89 , 100 = 30 , 900
(e) Calculate the total carrying value of fixed assets on 28 February 2017. Only available for registered users.
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To calculate the total carrying value of all fixed assets on 28 February 2017, sum the carrying values of Land and Buildings, Vehicles, and Equipment:
Carrying values noted:
Land and Buildings: R2,550,000
Vehicles: R695,296
Equipment (calculated earlier): R30,900
So the total is:
e x t T o t a l C a r r y i n g V a l u e = 2 , 550 , 000 + 695 , 296 + 30 , 900 = 3 , 276 , 196 ext{Total Carrying Value} = 2,550,000 + 695,296 + 30,900 = 3,276,196 e x t T o t a lC a rry in g Va l u e = 2 , 550 , 000 + 695 , 296 + 30 , 900 = 3 , 276 , 196 Join the NSC students using SimpleStudy...97% of StudentsReport Improved Results
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