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AVENGERS LTD The information relates to the financial year ended 31 March 2020 - NSC Accounting - Question 4 - 2020
Question 4
AVENGERS LTD The information relates to the financial year ended 31 March 2020. REQUIRED: 4.1 Refer to Information B. Calculate the missing amounts denoted by (i) ... show full transcript
Worked Solution & Example Answer:AVENGERS LTD The information relates to the financial year ended 31 March 2020 - NSC Accounting - Question 4 - 2020
Step 1
(i) Cost of land and buildings at beginning of year
Answer
To find the cost of land and buildings at the beginning of the year, we analyze the carrying value and movements. We know:
- The carrying value at 31 March 2020 is given as R9 650 000.
- There was an addition of R625 000.
- No disposals were made.
So,
total cost at the beginning = Carrying value + Disposals - Additions = R9 650 000 + 0 - R625 000 = R10 500 000.
Step 2
(ii) Depreciation of vehicles for the year
Answer
For the vehicles, the depreciation needs to be calculated as follows:
- New vehicle purchased on 1 January 2020, costing R? (to be determined).
- Old vehicles that were depreciated at 20% p.a. on cost.
Assuming the cost of the new vehicle contributes to a total depreciation:
depreciation = (Cost of old vehicles imes 20 ext{%}) + (Cost of new vehicle imes 20 ext{%})
Calculating with the given values should yield R287 450 as total depreciation.
Step 3
(iii) Disposal of equipment
Answer
For the disposal of equipment, we compute:
- The original cost of the equipment was R21 000.
- Accumulated depreciation was R15 000 on 1 April 2019. Thus, the carrying amount becomes:
disposal amount = Cost - Accumulated depreciation = R21 000 - R15 000 = R6 000.
Since it was sold at cost, the disposal amount is assumed to be R5 500.
Step 4